SUPERIOR MULTI-PACKAGING LIMITED REPORT 2012 · superior multi-packaging limited annual report 2012...

SUPERIOR MULTI-PACKAGING LIMITED

ANNUAL REPORT 2012

SU

PE

RIO

R M

ULT

I-PA

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AG

ING

LIMIT

ED

AN

NU

AL R

EP

OR

T 2012

Registration No. 197902249R

7 Benoi Sector, Singapore 629842Tel: +65 6268 3933 Fax: +65 6265 7151 www.smpl.com.sg

CONTENTS

1 Our Corporate Credo

3 Corporate Profi le

5 Group Financial Highlights

7 Corporate Structure

8 Message to Shareholders

10 Board of Directors

12 Corporate Information

13 Corporate Governance

24 Directors’ Report and Financial Statements

84 Properties Owned by the Group

85 Statistics of Shareholdings

87 Notice of Annual General Meeting

Proxy Form

1

SUPERIOR MULTI-PACKAGING LIMITED ANNUAL REPORT 2012

To become a regional leader in the manufacturing of

metal and fl exible packaging through product and

service excellence, continuous process improvements

and research in new technologies.

OUR CORPORATE CREDO

2

3


ABOUT US

Listed on the Singapore Exchange Main Board, we specialise in the

production of metal containers and fl exible packaging materials.

CORE PRODUCTS

We produce metal packaging in the form of high-quality pails and

cans for the paint, chemical, petrochemical, marine and edible oil

industries and also offers customised metal printing services.

We also manufacture a wide range of customised flexible

packaging materials for the food and beverage, healthcare and

pharmaceutical and other industries.

OUR FUTURE

With our proven record in the industry coupled with excellent

engineering capabilities, SMP is in a strong position to tap into

future growth opportunities in the various industries we serve.

Led by an experienced and dedicated management team, our

Group continuously invests in research and development to

refi ne our production processes and introduce new products

and services.

CORPORATE PROFILE

4

COMMITMENT TO PRODUCT

QUALITY

5


GROUP FINANCIAL HIGHLIGHTS

2012 2011 2010

For The Reporting Year – Exclude Discontinued Operations (in S$’000)

Revenue 157,698 161,360 165,660

Profi t before tax (12,050) 2,735 6,275

Profi t after tax (11,539) 2,221 4,562

Profi t attributable to owners of the parent (11,450) 2,264 4,570

Earnings per share (in cents) # (3.08) 0.62 1.59

2012 2011 2010

At Year End (in S$’000)

Current assets 83,500 103,788 101,175

Current liabilities 46,361 58,194 64,709

Net current assets 37,139 45,594 36,466

Net debt/(cash) 19,916 20,894 25,789

Total equity 70,667 85,359 82,036

Net tangible assets 70,469 82,986 79,615

Net assets value per share † 18.47 23.08 22.54

Net debt gearing ratio (%) 28.18 24.48 31.44

# Earnings per share for FY2012 is computed based on the weighted average number of ordinary shares of 372,189,699 (FY2011 = 367,876,000, FY2010 = 287,488,000)

† Net assets value per share for FY2012 is computed based on the number of ordinary shares of 382,706,000 (FY2011 = 369,656,000, FY2010 = 363,756,000)

REVENUE BY GEOGRAPHICAL LOCATION

OF END CUSTOMERS (%)

GROUP REVENUE (S$’000)

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

2012 2011 2010

2012

2011

2010

40.0% 48.8%

6.3%

4.9%

40.4% 48.9%

5.3%

5.4%

37.8% 51.5%

2.7%

8.0%Singapore

China

ASEAN

(other than

Singapore)

Others

6

CLIENTS’ SATISFACTION IS THE KEY TO OUR

SUCCESS

7


CORPORATE STRUCTURE


7


100% SUPERIOR INVESTMENTS HOLDINGS

PTE LTD

100% KUNSHAN HUADE METAL PACKAGING

CONTAINER CO., LTD

100% SUPERIOR PRECISION MOULDS &

PACKAGING CONTAINER (SHANGHAI)

CO., LTD

95% NEO TECH PACKAGING (SHANGHAI)

CO., LTD

100% GUANGZHOU SUPERIOR

MULTI-PACKAGING CO., LTD

100% SUPERIOR METAL PRINTING (HUIYANG)

CO., LTD

100% SUPERIOR (LANGFANG)

MULTI-PACKAGING CO., LTD

100% LANGFANG HUADE METAL PACKAGING

CONTAINER CO., LTD

100% SUPERIOR (TIANJIN) MULTI-PACKAGING

CO., LTD

100% SUPERIOR (CHENGDU) MULTI-PACKAGING

CO., LTD

100% SUPERIOR MULTI-PACKAGING (VIETNAM)

CO., LTD

100% SUPERIOR METAL PRINTING PHILS., INC

100% SUPERIOR CANS & PAILS CONTAINERS

(PUNE) PVT. LTD

100% ZHEJIANG GAOTE METAL DECORATING

CO., LTD

8


We will focus on improving

productivity, tightening of cost

control measures, close monitoring

of our businesses and alignment of

our resources to strengthen

our competitiveness.

Dear Shareholders,

On behalf of our Board of Directors, I would like to present

you with the annual report of Superior Multi-Packaging Limited

(“SMP”) and its subsidiaries for the fi nancial year ended

31 December 2012 (FY2012).

FY2012 OVERVIEW

Although economic conditions had improved somewhat in

2012, we continued to face escalating labour and raw material

costs while demand remained soft. Specifi cally, we were

affected by the volatility of housing and automotive demand in

our key China market.

As such, our revenue dipped by 2.3% from S$161.4 million in

FY2011 to S$157.7 million in FY2012.

Nevertheless, we remained steadfast in our commitment

towards cost reduction and rationalization of our operations

so as to improve our performance. As part of our business

rationalization process, we put through a series of asset

impairment following an in-depth management review as

well as an impairment of goodwill arising from previous

business acquisitions.

Due to these one-off charges, we reported a S$11.5 million

net loss in FY2012 compared to a S$1.8 profi t in the previous

fi nancial year.

Despite the above, our fi nancial position remains strong as

we generated S$7.4 million in net operating cash fl ow while

our net gearing ratio stood at a reasonable 28.2% as at

31 December 2012 (31 December 2011: 24.5%).

REALIZING SHAREHOLDER VALUE THROUGH

GENERAL OFFER BY CROWN SPECIALITY

PACKAGING INVESTMENT PTE. LTD.

On 31 August 2012, CROWN Speciality Packaging Investment

Pte. Ltd. (“CROWN Speciality”) launched a voluntary

conditional cash offer to acquire all the issued and paid up

ordinary shares of SMP at S$0.14 per share (the “Offer”).

The ultimate parent company of CROWN Speciality is Crown

Holdings, Inc. (“Crown Holdings”).

Crown Holdings is listed on the NYSE and is a leading

manufacturer of packaging products for consumer

marketing companies around the world and is engaged in

the design, manufacture and sale of packaging products for

consumer goods.

MESSAGE TO SHAREHOLDERS

9


Through the Offer, SMP shareholders had the opportunity to

realise their investments in SMP for a cash consideration at an

attractive premium over the historical transacted prices of SMP

shares. As a point of illustration, the Offer price was a 54.5%

premium over the volume weighted average price of SMP

shares for the three month period prior to and including the last

trading day on 14 August 2012.

The Offer became unconditional on 28 November 2012 and as

at 31 December 2012, CROWN Speciality held approximately

85.13% of the issued share capital of SMP. This marked an

important milestone in SMP’s corporate history.

GOING FORWARD

With continuing infl ationary pressure, SMP is expected to face

volatility in raw material prices, energy cost and labour cost.

Notwithstanding these challenges, we will focus on improving

productivity, tightening of cost control measures, close

monitoring of our businesses and alignment of our resources to

strengthen our competitiveness.

With CROWN Speciality on board, there will be opportunities

for SMP to leverage on the know-how of the CROWN Group

to expand SMP’s operations synergistically while streamlining

unnecessary expenses.

APPRECIATION

On behalf of SMP, I would like to take this opportunity to

express my heartfelt appreciation to all the shareholders and

customers for their support as well as loyalty over the years.

In addition, I would like to thank our employees and business

associates for their invaluable contributions.

Last but not least, I would like to express my gratitude to

my fellow Board Members and management team for their

steadfast commitment as we chart a new road map for SMP’s

continued progress.

Salaerts Jozef

Non-Executive Chairman

10


BOARD OF DIRECTORS

MR SALAERTS JOZEF

Non-Executive Chairman

Mr Salaerts was appointed the Group’s Non-Executive

Chairman in November 2012. He is the President of Crown

Holdings, Inc.’s Asia-Pacifi c Division. Crown Holdings, Inc.

is a worldwide leader in the design, manufacture and sale of

packaging products for consumer goods and is listed on the

New York Stock Exchange.

Mr Salaerts has graduate degrees in Applied Economics

and Commercial Engineering from the University of Antwerp,

Belgium and is a CPA Belgium.

01

MR GOH HOCK HUAT

Non-Executive Director

Mr Goh was appointed the Group’s Non-Executive Director in

November 2012. He is the Senior Vice President, Finance and

Human Resource and Chief Financial Offi cer of Crown Holdings,

Inc.’s Asia-Pacifi c Division.

Mr Goh has a graduate degree in Commerce from the University

of Otago, New Zealand and is a CPA Singapore.

02

11


MR KHONG HENG KIN

Independent & Non-Executive Director

Mr Khong was appointed to the Board as an independent

and Non-Executive Director in November 2012. He is also

the Chairman of the Nominating Committee and Executive

Resource and Compensation Committee and member of

the Audit Committee. Mr Khong has a professional diploma

in Accountancy from Singapore Polytechnic and is a FCPA

Singapore and FCPA Australia.

MR LYE THIAM FATT JOSEPH VICTOR

Mr Victor Lye has over 25 years’ operational and strategic

leadership experience in public policy, investment analysis,

equities sales, corporate fi nance, direct investments, asset

management and insurance.

Mr Lye has a First Class Honours degree in Economics

from the University of Adelaide under a Colombo Plan

Scholarship. He is a Chartered Financial Analyst and a

Certified Financial Planner.

DR LOH HAN TONG

Dr Loh Han Tong is an Associate Professor in the Mechanical

Engineering Department at the National University of Singapore

(NUS). He is currently the Director of the Bachelor of Technology

Programme at the Faculty of Engineering in NUS.

Associate Professor Loh holds a doctorate in Mechanical

Engineering from the University of Michigan at Ann Arbor,

USA. He was a Colombo Plan Scholar and a NUS Overseas

Postgraduate Scholar. He also had been a Visiting Scholar at

Stanford University and a Fellow of the Singapore MIT Alliance.

03

05

04

12


CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr Salaerts Jozef

(Non-Executive Chairman)

Mr Goh Hock Huat

(Non-Executive Director)

Dr Loh Han Tong

(Non-Executive Director)

Mr Khong Heng Kin

(Independent & Non-Executive Director)

Mr Lye Thiam Fatt Joseph Victor

(Independent & Non-Executive Director)

EXECUTIVE COMMITTEE

Mr Salaerts Jozef (Chairman)

Mr Goh Hock Huat

Dr Loh Han Tong

AUDIT COMMITTEE

Mr Lye Thiam Fatt Joseph Victor (Chairman)

Mr Goh Hock Huat

Mr Khong Heng Kin

NOMINATING COMMITTEE

Mr Khong Heng Kin (Chairman)

Mr Salaerts Jozef


EXECUTIVE RESOURCE

AND COMPENSATION COMMITTEE


Mr Salaerts Jozef


JOINT COMPANY SECRETARIES

Ms Juliana Lee Kim Lian

Ms Liew Meng Ling

REGISTRAR AND

SHARE TRANSFER OFFICER

M & C Services Private Limited

112 Robinson Road #05-01

Singapore 068902

Tel: 6227 6660

Fax: 6225 1452

REGISTERED OFFICE

80 Robinson Road #18-03

Singapore 068898

Tel: 6436 4808

Fax: 6323 0922

COMPANY REGISTRATION NO.

197902249R

MAIN BANKERS

United Overseas Bank Ltd

DBS Bank Ltd

Oversea-Chinese Banking Corporation Ltd

Australia and New Zealand Banking Group Ltd

Malayan Banking Berhad

AUDITOR

RSM Chio Lim LLP

Certifi ed Public Accountants Singapore

(Partner In Charge: Mr Lim Lee Meng)

Effective from year ended 31 December 2010

13


CORPORATE GOVERNANCE

The Company is committed to maintain a high standard of corporate governance within the Company and its subsidiaries.

The Company aims to comply with the recommendations of the Code of Corporate Governance 2005 (“Code”) through effective

self-regulatory corporate practices to protect and enhance the interests of its shareholders. This statement describes the

Company’s corporate governance processes and activities with reference to the Code. The Board is pleased to confi rm that for

the fi nancial year ended 31 December 2012, the Company and its subsidiaries generally adhered to the principles as set out in

the Code.

THE BOARD’S CONDUCT OF ITS AFFAIRS

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively

responsible for the success of the company. The Board works with Management to achieve this and the Management remains

accountable to the Board.

The Board effectively leads the Company, working together with the Management to achieve success for the Group.

The Management remains accountable to the Board.

In addition to its statutory duties, the Board’s principal functions are:

1. To provide guidance on and to approve the Group’s strategic plans, key operational initiatives, major investments and

divestments and funding requirements;

2. To approve the annual budget, review the performance of the business and to approve the release of the fi nancial results of

the Group to shareholders;

3. To provide guidance in the overall management of the business and affairs of the Group and to review Management’s

performance;

4. To set the framework for and to oversee the processes for risk management, fi nancial reporting and compliance;

5. To set the Company’s values and standards and to provide guidance to the Management to ensure that the Company’s

obligations to its shareholders and the public are met;

6. To approve the recommended framework of remuneration for the Board and key executives by the Executive Resource and

Compensation Committee.

The Board is obliged to act in good faith and consider all times the interest of the Company.

The Company has adopted a set of approving authority limit, setting out the level of authorization required for specifi ed transactions,

including those that require Board approval.

Newly appointed directors will be briefed by the Management on the history and business operations and corporate governance

practices of the Group. The Board is updated from time to time on changes to regulations and accounting standards which have

a material bearing on the Company.

The Company will issue a formal letter of appointment to new directors setting out their duties and obligations when they

are appointed.

To assist in the execution of its responsibilities, the Board has delegated decisions on certain Board matters to specialize Board

Committees. Minutes of the Board Committee Meetings are available to all Board members.

During the year 2012, 3 scheduled Board Meetings were held. Ad hoc meetings are held when the circumstances require.

Details relating to the number of board and committee meetings held in the year 2012 and the attendance of the Directors are

set out on page 23 of this Annual Report.

BOARD COMPOSITION AND GUIDANCE

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on

corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to

dominate the Board’s decision making.

For the fi nancial year ended 31 December 2012, the Board comprises fi ve Directors, of which two of them are independent Directors.

14


The Board is supported by various committees, namely, the Executive Committee, the Audit Committee, the Executive Resource

and Compensation Committee and the Nominating Committee whose powers and duties are described below. The Board is able

to exercise objective judgement independently from the Management and no individual or small group of individuals dominate

the decisions of the Board. Non-executive Directors, when presented with proposals for their consideration, will evaluate the

assumptions made by the Management and these Directors also provide guidance to Management on different aspects of the

Company’s business.

The Board is of the opinion that, given the scope and nature of the Group’s operations, the size of the Board is appropriate for

effective decision making.

The Board is made up of Directors who are qualifi ed and experienced in various fi elds including manufacturing, engineering,

business administration and accountancy. The profi le of each of the Directors is provided on pages 10 and 11 of this Annual

Report. Accordingly, the Board comprises persons, who as a group, have the necessary competencies to lead and manage

the Company.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Principle 3: There should be a clear division of responsibilities at the top of the company – the working of the Board and the

executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one

individual represents a considerable concentration of power.

The roles of the Chairman and the Chief Executive Offi cer are separate. This is to ensure an appropriate balance of power,

increased accountability and greater capacity of the Board for independent decision-making.

The Chairman with the assistance of the Management ensures that there is effective communication with shareholders, encourages

constructive relations between the Board and Management, as well as between Board members and promotes high standards

of corporate governance.

For good corporate governance, the Board has appointed Mr Lye Thiam Fatt Joseph Victor as the Lead Independent Director of

the Company.

ACCESS TO INFORMATION

Principle 6: In order to fulfi ll their responsibilities, Board members should be provided with complete, adequate and timely

information prior to board meetings and on an ongoing basis.

Board papers are generally sent to the Directors at least one week prior to meetings of the Board and these would ordinarily include:

1. Financial management reports;

2. Reports on performance of the Group (together with notes on any signifi cant variances from the budget);

3. Papers pertaining to matters requiring the Board’s decision; and

4. Updates on key outstanding issues, strategic plans and developments in the Group.

The Company circulates copies of the Minutes of the Meetings of all Board Committees (including the Executive Committee) to all

members of the Board to keep them informed of ongoing developments within the Group.

Each Director has separate and independent access to the Company’s senior management and the Company Secretary at all

times. Should the Board, whether as a group or individually, require independent professional advice, such professionals (who will

be selected with the approval of the Chairman or the Chairman of the Committee requiring such advice) will be appointed at the

Company’s expense.

The Company Secretary attends all Board Meetings and is responsible for ensuring that Board procedures are followed. With

the assistance of the Management and at the direction of the Chairman of the various sub-committees, the Company Secretary

facilitates the information fl ow within the Board and its Committees and between senior management and the Non-executive

directors. The Company Secretary also advises the Board on compliance with the terms of the Companies Act, Cap. 50 and the

Listing Manual. The appointment and the removal of the Company Secretary are decisions taken by the Board as a whole.


15


BOARD COMMITTEES

Executive Committee

As of date hereof, the Executive Committee comprises:

Mr Salaerts Jozef (Chairman)

Dr Loh Han Tong (Member)

Mr Goh Hock Huat (Member)

The Executive Committee also formulates the Group’s strategic development initiatives and provides direction on new investments,

ongoing business operations and fi nancial matters.

Executive Resource and Compensation Committee

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fi xing the

remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the

company successfully but companies should avoid paying more than is necessary for this purpose. A signifi cant proportion of

executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

The Executive Resource and Compensation Committee comprises the following Non-executive Directors:


Mr Lye Thiam Fatt Joseph Victor (Member)

Mr Salaerts Jozef (Member)

Majority of the Committee members are independent Directors. The Executive Resource and Compensation Committee is

responsible for the administration of the Superior Multi-Packaging (2001) Executives’ Share Option Scheme (“the Scheme”) which

is open to all full time employees of the Company or its subsidiaries holding the rank of Executive Offi cer and above as well as

Non-executive Directors, subject to the approval of independent shareholders, controlling shareholders and their associates.

The Scheme was amended on 30 July 2007 to include and incentivise more employees who perform executive functions in the

Group, to provide greater fl exibility in deciding the amount of options to be granted to categories of participants in a fi nancial year

as well as the fl exibility in deciding the amount of options to be granted in a fi nancial year.

On 29 April 2011, shareholders approved, inter-alia, the extension of the Scheme for a further period of 10 years from 25 May 2011.

Details of the Scheme are set out on pages 26 and 27 of this Annual Report.

The Executive Resource and Compensation Committee’s role also includes reviewing and recommending to the Board an

appropriate and competitive framework of the remuneration for the Board and key executives of the Group and to ensure that it is

appropriate to attract, retain and motivate them to run the Group successfully. When the Committee deems it appropriate, it will

appoint experts in the fi eld of executive compensation to advise it.

In setting remuneration packages, the Executive Resource and Compensation Committee takes into account the performance

of the Group as well as the Directors and key executives whilst aligning their interests with those of shareholders and linking

rewards to corporate and individual performance as well as industry benchmarks. The review of remuneration packages takes

into consideration the long term interests of the Group. The review covers all aspects of remuneration including salaries, fees,

allowances, bonuses, options and benefi ts-in-kind. The Committee’s recommendations are submitted to the Board for approval.

The payment of Directors’ fees is subject to the approval of shareholders.

Service contracts for Executive Directors are for a fi xed appointment period and do not contain onerous record claims. Executive

Directors have in their service contracts a notice period of six months or less.

Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the

procedure for setting remuneration, in the company’s annual report. It should provide disclosure in relation to its remuneration

policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.


16


The remuneration of Directors of the Company for the year 2012 is set out below:

No. of

options

outstanding

Allowances as at 31

Fee Salary Bonus & Benefi ts Total December

Directors of the Company % % % % % 2012

Below $250,000:

1 Prof Tan Chin Tiong (a) 100 – – – 100 –

2 Tay Puan Siong (b) 100 – – – 100 –

3 Goh Chuen Jin (c) 100 – – – 100 –

4 Evelyn Tan Ang Ang (d) 100 – – – 100 –

5 Salaerts Jozef (e) 100 – – – 100 –

6 Goh Hock Huat (f) 100 – – – 100 –

7 Khong Heng Kin (g) 100 – – – 100 –

8 Lye Thiam Fatt Joseph Victor (h) – – – – – –

9 Dr Loh Han Tong (i) – 88 7 5 100 –

$250,000 to $500,000:

10 Wang Gee Hock (j) – 70 16 14 100 –

(a) Prof Tan Chin Tiong resigned on 8 January 2013.(b) Tay Puan Siong resigned on 14 November 2012.(c) Goh Chuen Jin resigned on 8 January 2013.(d) Evelyn Tan Ang Ang resigned on 14 November 2012.(e) Salaerts Jozef was appointed as Non-Executive Director on 14 November 2012.(f) Goh Hock Huat was appointed as Non-Executive Director on 14 November 2012.(g) Khong Heng Kin was appointed as Independent Non-Executive Director on 14 November 2012.(h) Lye Thiam Fatt Joseph Victor was appointed as Independent Non-Executive Director on 8 January 2013.(i) Dr Loh Han Tong resigned as Executive Director on 29 February 2012 and was re-appointed as Non-Executive Director on

8 January 2013.(j) Wang Gee Hock resigned on 14 November 2012.

The remuneration of the key executives of the Company for the year 2012 are set below:

No. of

options

outstanding

Allowances as at 31

Salary Bonus & Benefi ts Total December

Key Executives of the Company % % % % 2012

$250,000 to $500,000:

1 San Meng Chee, Chris 70 19 11 100 –

Below $250,000:

1 Wan Chee Meng (a) 83 – 17 100 –

(a) Wan Chee Meng was appointed CEO of the Company on 19 November 2012.

This grouping is done to maintain the confi dentiality of the remuneration packages of the key executives.

No immediate family members of the Directors are or were employed by the Group.

Details of the Company’s Share Option Scheme are set out in the Directors’ Report on pages 26 and 27 of this Annual Report and

note 24 to the Financial Statements.


17


Nominating Committee

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each

director to the effectiveness of the Board.

To facilitate a formal and transparent process for the appointment of new directors, the Board has formed the Nominating Committee.

The Nominating Committee comprises:


Mr Lye Thiam Fatt Joseph Victor (Member)

Mr Salaerts Jozef (Member)

All the Committee members are Non-executive Directors of the Company. The Chairman of the Committee is not directly associated

with a substantial shareholder of the Company.

The Nominating Committee has written terms of reference and its role includes:

1. Making recommendations to the Board on all board appointments;

2. Re-nominating each individual Director having regard to the Director’s contribution to the Group including attendance,

preparedness, participation and candour;

3. Considering and determining on an annual basis, whether or not a Director is independent;

4. Deciding on how the Board’s performance may be evaluated and propose objective performance criteria to the Board; and

5. Assessing the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of

the Board.

The independence of each Director is reviewed annually by the Nominating Committee based on the Code’s defi nition of what

constitutes an independent director.

The Nominating Committee is of the view that:

(a) Mr Salaerts Jozef, Dr Loh Han Tong and Mr Goh Hock Huat are not Independent Directors; and

(b) Although some of the other Directors have other board representations, the Nominating Committee is satisfi ed that these

Directors are able to, and have, adequately carried out their duties as Directors of the Company. The Board has experienced

minimal competing time commitments among its members as Board meetings are planned and scheduled with the

involvement of the Board members well in advance of the meeting dates.

Pursuant to the Articles of Association of the Company:

(i) One third of the Directors retire from offi ce at every annual general meeting;

(ii) A Managing Director is subject to the same provisions as to retirement, resignation and removal as the other Directors of

the Company;

(iii) Directors appointed during the course of the year must submit themselves for re-election at the next annual general meeting

of the Company.

As the Board was constituted only recently, it may not be possible for the Nominating Committee to perform a full evaluation of the

individual members of the Board and the effectiveness of the Board as a whole at this juncture. Nevertheless, the members of the

new Board and various committees had convened and appropriately dealt with major issues that arose.

The search for new directors, if any, will be made through executive search companies, contacts and recommendations and

shortlisted persons will be evaluated by the Nominating Committee before being recommended to the Board for consideration.


18


ACCOUNTABILITY AND AUDIT

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position

and prospects.

Accountability

In presenting the annual fi nancial statements and announcements of fi nancial results to shareholders, it is the aim of the Board to

provide shareholders with a balanced and understandable assessment of the Company’s and Group’s performance, position and

prospects. Through the circulation of the Minutes of the Executive Committee meetings, the Board is provided with information as

to the Company’s performance, position and prospects on a regular basis.

Audit Committee

Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority

and duties.

The Audit Committee presently comprises:

Mr Lye Thiam Fatt Joseph Victor (Chairman)

Mr Khong Heng Kin (Member)

Mr Goh Hock Huat (Member)

Majority of the Committee members are independent Non-executive Directors, appropriately qualifi ed to discharge their

responsibilities. The members have had many years of experience in accounting, audit, business and fi nancial management.

The Board considers that the members of the Audit Committee are appropriately qualifi ed to discharge the responsibilities of

the Audit Committee.

The Audit Committee has written terms of reference. Specifi cally, the Audit Committee meets on a periodic basis to perform the

following functions:

1. To assist the Board in the identifi cation and monitoring of areas of signifi cant business risks with the help of internal auditors;

2. To review the scope and results of the audit and its cost effectiveness, and the independence and objectivity of the

external auditors;

3. To review compliance with the Listing Manual of the Singapore Exchange Securities Trading Limited and the Code,

effectiveness of fi nancial and accounting control systems and management of exposure to fi nancial and business risks;

4. To review with the external and internal auditors their respective audit plans;

5. To review the internal auditors’ reports and their evaluation of the Group’s system of internal controls;

6. To recommend the appointment of auditors and to approve the remuneration and terms of engagement of the

external auditors;

7. To review signifi cant fi nancial reporting issues and judgments to ensure the integrity of the fi nancial statements;

8. To review the adequacy and effectiveness of the internal audit function;

9. To review the assistance given by the Company’s offi cers to the internal and external auditors;

10. To review the Group’s management reports before they are submitted to the Board;

11. To review the statement of fi nancial position and consolidated statements of income and comprehensive income of the

Group and other fi nancial statements and other documents accompanying the same of the Company in addition to formal

announcements relating to the Company’s fi nancial performance and thereafter to submit the same to the Board for

approval; and

12. To review and where appropriate, approve interested person transactions.

The Audit Committee is also authorised to investigate any matter within its terms of reference. It has full access to the Management

and the discretion to invite any Director or executive offi cer to attend its meetings. It also has reasonable resources to enable it to

discharge its functions properly.


19


The Audit Committee has put in place a whistle-blowing policy by which staff of the Company may, in confi dence, raise concerns

about possible improprieties in matters of fi nancial reporting or other matters.

The Audit Committee had met with the external auditors, without the presence of the Company’s management. This was to review

the co-operation rendered by the Management to the external auditors, the adequacy of audit arrangements, with particular

emphasis on the scope and quality of their audits, and the independence and objectivity of the external auditors.

The Audit Committee has undertaken a review of all non-audit services provided by the external auditors and in the Audit

Committee’s opinion, the provision of these services does not affect the independence of the external auditors. Please refer to

note 10 of the Financial Statements for details of fees payable to the auditors in respect of audit and non-audit services.

The Company complies with Rules 712 and 715 of the SGX-ST Listing Manual.

Internal Controls and Risk Management

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the

shareholders’ investments and the company’s assets.

The Board acknowledges that it is responsible for the overall internal control framework of the Group and is fully aware of the

need to put in place a system of internal controls within the Group to safeguard shareholders’ interests and the Group’s assets.

However, the Board and the AC recognize that no system of internal controls will preclude all errors, irregularities, material fi nancial

misstatements or loss, nor can it provide absolute assurance that the Group will not be adversely affected by any event that could

be reasonably foreseen as it strives to achieve its business objectives.

Management has put in place and continues to review and enhance the Group’s system of standard operating procedures and

internal controls to ensure that suffi cient checks and balances exist within the system. The AC ensures that these controls are

effective by engaging an external consultant as the internal auditor. The internal auditor develops and works within the scope of

an audit plan, which has been approved by the AC, to review and test the adequacy and effectiveness of such procedures and

internal controls.

The independent external auditors will also in the course of the external audit, consider internal controls relevant to the Group’s

preparation and fair presentation of the fi nancial statements. Material non-compliance and recommendation for improvement, if

any, will be reported to the AC. The AC, with the participation of the Board, has reviewed the adequacy of the Group’s internal

controls that address the Group’s fi nancial, operational and compliance risk. The AC has also reviewed and will continue to monitor

the effectiveness of the actions taken by the Management on the recommendations made by both the internal and external

auditors in this respect.

Based on the audit reports and recommendations from the internal auditors and independent external auditors, the actions

taken by the Management, the on-going review and continuing efforts at enhancing controls and processes, the Board, with the

concurrence of the AC, is of the opinion that the system of internal controls in place are adequate in meeting the needs of the

Group in its current business environment.

INTERNAL AUDIT

Principle 13: The Company should establish an internal audit function that is independent of the activities it audits.

The Company has outsourced its internal audit function to a certifi ed public accounting fi rm who meets the standards set by

internationally recognized professional bodies including the Standards for the Professional Practice of Internal Auditing set by The

Institute of Internal Auditors.

The primary objectives of the internal audit reviews are to help:

1. Assess whether adequate systems of internal controls are in place to protect the funds and assets of the Company and

to control commitment and disbursement of expenditure and other outlay and to ensure such control procedures are

complied with;

2. Assess whether operations of the business processes under review are conducted effi ciently and effectively; and

3. Identify opportunities for improvement of internal controls.

The internal auditors report primarily to the Chairman of the Audit Committee. The Audit Committee ensures that the internal audit

function has adequate resources and this standard is applied to all companies in the Group.


20


The internal auditors plan its internal audit schedules in consultation with but independent of the Management. The audit plan is

submitted to the Audit Committee for approval prior to commencement of the internal audit. The Audit Committee reviews the

activities of the internal auditors on a regular basis, including overseeing and monitoring of the implementation of the improvements

required on internal control weaknesses identifi ed.

COMMUNICATIONS WITH THE SHAREHOLDERS

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to

communicate their views on various matters affecting the company.

(a) Communications with Shareholders

The Company ensures that timely and adequate disclosure of information on matters of material impact on the Company are

made to shareholders of the Company, in compliance with the requirements set out in the Listing Manual of the Singapore

Exchange Securities Trading Limited with particular reference to the Corporate Disclosure Policy set out therein. In this

respect, the Company announces its results to shareholders within the mandatory period. The Company does not practise

selective disclosure of material information.

(b) Greater Shareholder Participation

At general meetings, shareholders of the Company are given the opportunity to air their views and ask Directors or

Management questions regarding the Company. The Board and Management are present at these meetings to address

any questions that shareholders may have. The external auditors are also present to assist the Board in addressing

queries by shareholders.

The Articles allow a member of the Company to appoint one or two proxies to attend and vote at general meetings. Separate

resolutions on each distinct issue are tabled at general meetings.

Interested Person Transactions

The Company has established internal control policies to ensure that transactions with interested persons are properly reviewed,

approved and conducted at arms’ length basis.

During the year 2012, there were no interested person transactions.

Dealings in Securities

In line with the Rules of the SGX-ST’s Listing Manual, the Company has adopted a policy prohibiting its offi cers from dealing in

the Company’s shares whilst they are in possession of unpublished material price sensitive information and during the period

commencing one month before the announcement of the Company’s half year and full year fi nancial results and ending on the

date of announcement of such fi nancial results. In addition, Directors and key executives are expected to observe insider trading

laws at all times even when dealing in securities within the permitted trading period. They are also discouraged from dealing in the

Company’s shares on short-term considerations.


21


Directors’ Information

Name of Director

Date of

Appointment

Date of

Last

Re-election

as a

Director

Other

Committees

Academic and

Professional

Qualifi cations Directorships and Other Major Appointments

Salaerts Jozef (f)

(Non-executive

Chairman)

14/11/2012 – Chairman of

the Executive

Committee

Member of the

Nominating

Committee

Member of

the Executive

Resource &

Compensation

Committee

Certifi ed Public

Accountant

(Belgium)

Grad Degree

– Commercial

Engineer

– Antwerp,

Belgium

Grad Degree

– Applied

Economics –

Antwerp, Belgium

Directorships:

CROWN Asia Pacifi c Holdings Pte. Ltd.

CROWN Beverage Cans Singapore Pte. Ltd.

CROWN Packaging Investment Pte. Ltd.

CROWN Speciality Packaging Investment Pte. Ltd.

CROWN Food Packaging (Thailand) Public Co. Ltd.

CROWN Bevcan And Closures (Thailand) Co. Ltd.

CROWN Foodcan (Hatyai) Co. Ltd.

CROWN AP (Thailand) Company Ltd

CROWN Beverage Cans Malaysia Sdn Bhd

CROWN Beverage Cans Saigon Ltd

CROWN Beverage Cans Hanoi Ltd

CROWN Beverage Cans (Dong Nai) Ltd

CROWN Beverage Cans Danang Ltd

CROWN Beverage Cans Hong Kong Ltd

CROWN Packaging Investment (H.K.) Ltd

CROWN China Holdings (Hong Kong) Ltd

CROWN Beverage Cans Beijing Ltd

CROWN Beverage Cans Shanghai Ltd

CROWN Beverage Cans Huizhou Ltd

CROWN Beverage Cans Hangzhou Ltd

CROWN Beverage Cans Putian Ltd

CROWN Beverage Cans Heshan Ltd

CROWN Beverage Cans Ziyang Ltd

CROWN Beverage Cans Xinxiang Ltd

CROWN Beverage Cans Changchun Ltd

CROWN Beverage Cans Nanning Ltd

Wuxi Huapeng Closures Co., Ltd.

Foshan Continental Can Co. Ltd.

Foshan Crown Easy Opening End Co. Ltd.

CROWN Hanoi Investment Co. Ltd.

CROWN Asia Pacifi c Investments (T) Ltd.

CROWN Indo-China Investment Co. Ltd.

CROWN Beverage Cans (Cambodia) Ltd

CROWN Beverage Cans Sihanoukville Ltd

P. T. Crown Closures Indonesia

(Under members’ voluntary liquidation)

Dr Loh Han Tong (g)

(Non-executive

Director)

08/01/2013 – Member of

the Executive

Committee

PhD, University

of Michigan (Ann

Arbor)

M. Eng, National

University of

Singapore

B. Eng (Hons),

University of

Adelaide, Australia

Directorship:

Yenom Industries Pte Ltd


22


Name of Director

Date of

Appointment

Date of

Last

Re-election

as a

Director

Other

Committees

Academic and

Professional


Goh Hock Huat (h)

(Non-executive

Director)

14/11/2012 – Member of

the Executive

Committee

Member of

the Audit

Committee

C.M.A. – N.Z.

CPA Singapore

A.C.A. – N.Z.

Bachelor of

Commerce,

University of

Otago, N.Z.

Directorships:

CROWN Asia Pacifi c Holdings Pte. Ltd.

CROWN Beverage Cans Singapore Pte. Ltd.

CROWN Packaging Investment Pte. Ltd.

CROWN Speciality Packaging Investment Pte. Ltd.

CROWN Food Packaging (Thailand) Public Co. Ltd.

CROWN Bevcan And Closures (Thailand) Co. Ltd.

CROWN Foodcan (Hatyai) Co. Ltd.

Pet Containers (Thailand) Ltd.

CROWN AP (Thailand) Company Ltd

ZPJK Thailand Co., Ltd.

CarnaudMetalbox Packaging Sdn Bhd

CROWN Beverage Cans Malaysia Sdn Bhd

CROWN Beverage Cans Saigon Ltd

CROWN Beverage Cans Hanoi Ltd

CROWN Beverage Cans (Dong Nai) Ltd

CROWN Beverage Cans Danang Ltd

CROWN Beverage Cans Hong Kong Ltd

CROWN Packaging Investment (H.K.) Ltd

CROWN China Holdings (Hong Kong) Ltd

CROWN Beverage Cans Beijing Ltd

CROWN Beverage Cans Shanghai Ltd

CROWN Beverage Cans Huizhou Ltd

CROWN Beverage Cans Hangzhou Ltd

CROWN Beverage Cans Putian Ltd

CROWN Beverage Cans Heshan Ltd

CROWN Beverage Cans Ziyang Ltd

CROWN Beverage Cans Xinxiang Ltd

CROWN Beverage Cans Changchun Ltd

CROWN Beverage Cans Nanning Ltd

Wuxi Huapeng Closures Co., Ltd.

Foshan Continental Can Co. Ltd.

Foshan Crown Easy Opening End Co. Ltd.

CROWN Hanoi Investment Co. Ltd.

CROWN Asia Pacifi c Investments (T) Ltd.

CROWN Indo-China Investment Co. Ltd.

CROWN Beverage Cans (Cambodia) Ltd

CROWN Beverage Cans Sihanoukville Ltd

P. T. Crown Closures Indonesia

(under members’ voluntary liquidation)

Lye Thiam Fatt

Joseph Victor (i)

(Lead Independent

Director)

08/01/2013 – Chairman

of the Audit

Committee

Member of the

Nominating

Committee

Member of

the Executive

Resource &

Compensation

Committee

B. Economics

(First Class

Honours) –

University

of Adelaide,

Australia

Chartered

Financial Analyst

Certifi ed Financial

Planner

Directorships:

Lion Land Ventures One Pte Ltd

WMG Management Pte Ltd

Singapore Chinese Orchestra Company Limited


23


Name of Director

Date of

Appointment

Date of

Last

Re-election

as a

Director

Other

Committees

Academic and

Professional


Khong Heng Kin (j)

(Independent

Director)

14/11/2012 – Member of

the Audit

Committee

Chairman of

the Nominating

Committee

Chairman of

the Executive

Resource &

Compensation

Committe

FCPA Singapore

FCPA Australia

Nil.

Attendance at Board and Committee Meetings during the year 2012

Name

Board

Executive

Committee

Audit

Committee

Nominating

Committee

Executive Resource

and Compensation

Committee

No. of

Meetings

Held

No. of

Meetings

Attended

No. of

Meetings

Held

No. of

Meetings

Attended

No. of

Meetings

Held

No. of

Meetings

Attended

No. of

Meetings

Held

No. of

Meetings

Attended

No. of

Meetings

Held

No. of

Meetings

Attended

Prof Tan Chin Tiong (a) 3 3 4 4 – – 1 1 1 1

Tay Puan Siong (b) 3 3 – – 2 2 1 1 1 1

Wang Gee Hock (c) 3 3 4 4 – – – – – –

Goh Chuen Jin (d) 3 3 – – 2 2 1 1 1 1

Evelyn Tan Ang Ang (e) 3 3 4 4 2 2 – – – –

Salaerts Jozef (f) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Dr Loh Han Tong (g) 3 1 4 1 N/A N/A N/A N/A N/A N/A

Goh Hock Huat (h) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Lye Thiam Fatt Joseph

Victor (i) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Khong Heng Kin (j) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

(a) Prof Tan Chin Tiong resigned on 8 January 2013.(b) Tay Puan Siong resigned on 14 November 2012.(c) Wang Gee Hock resigned on 14 November 2012.(d) Goh Chuen Jin resigned on 8 January 2013.(e) Evelyn Tan Ang Ang resigned on 14 November 2012.(f) Salaerts Jozef was appointed as Non-Executive Director on 14 November 2012.(g) Dr Loh Han Tong resigned as Executive Director on 29 February 2012 and was reappointed as Non-Executive Director on

8 January 2013.(h) Goh Hock Huat was appointed as Non-Executive Director on 14 November 2012.(i) Lye Thiam Fatt Joseph Victor was appointed as Independent Non-Executive Director on 8 January 2013.(j) Khong Heng Kin was appointed as Independent Non-Executive Director on 14 November 2012.


24


CONTENTS

25 Directors’ Report

29 Statement by Directors

30 Independent Auditors’ Report

31 Consolidated Statement of Profi t or Loss

32 Consolidated Statement of Comprehensive Income

33 Statements of Financial Position

34 Statements of Changes in Equity

36 Consolidated Statement of Cash Flows

37 Notes to the Financial Statements

DIRECTORS’ REPORT AND

FINANCIAL STATEMENTS

25


The Directors of the Company are pleased to present their report together with the audited fi nancial statements of the Company

and of the Group for the reporting year ended 31 December 2012.

1. DIRECTORS AT DATE OF REPORT

The Directors of the Company in offi ce at the date of this report are:

Salaerts Jozef (Non-executive Chairman, appointed on 14 November 2012)

Goh Hock Huat (Appointed on 14 November 2012)

Assoc Prof Loh Han Tong (Appointed on 8 January 2013)

Khong Heng Kin (Appointed on 14 November 2012)

Lye Thiam Fatt Joseph Victor (Lead Independent Director, appointed on 8 January 2013)

2. ARRANGEMENTS TO ENABLE DIRECTOR TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION

OF SHARES AND DEBENTURES

Neither at the end of the reporting year nor at any time during the reporting year did there subsist any arrangement whose

object is to enable the Directors of the Company to acquire benefi ts by means of the acquisition of shares or debentures in

the Company or any other body corporate except for the options rights mentioned below.

3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The Directors of the Company holding offi ce at the end of the reporting year had no interests in the share capital, debentures

and options of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the

Company under Section 164 of the Companies Act, Chapter 50 except as follows:

Direct Interest Deemed Interest

Name of directors At beginning At end At beginning At end

and companies of the of the of the of the

in which interests are held reporting year reporting year reporting year reporting year

Superior Multi-Packaging Limited Number of Shares

Prof Tan Chin Tiong 215,000 1,015,000 225,000 225,000

Ultimate Parent Company

Crown Holdings, Inc

Common stock of US$5.00 each

Salaerts Jozef 70,107 90,836 28 28

Share Options to

Subscribe for Shares

At beginning At end

of the of the

reporting year reporting year

Superior Multi-Packaging Limited

Prof Tan Chin Tiong 800,000 –

Crown Holdings, Inc

Options over common stock of US$5.00 each

Salaerts Jozef 50,000 50,000

Goh Hock Huat 40,000 40,000

The directors’ interests as at 21 January 2013 were the same as those at the end of the reporting year, except for Prof Tan

Chin Tiong, who was no longer a director as at 21 January 2013.

DIRECTORS’ REPORT

26


DIRECTORS’ REPORT

4. CONTRACTUAL BENEFITS OF DIRECTORS

Since the beginning of the reporting year, no Director of the Company has received or become entitled to receive a benefi t

which is required to be disclosed under section 201(8) of the Companies Act, Chapter 50, by reason of a contract made by

the Company or a related corporation with the Director or with a fi rm of which he is a member, or with a company in which

he has a substantial fi nancial interest except as disclosed in the fi nancial statements.

5. OPTIONS TO TAKE UP UNISSUED SHARES

The Superior Multi-Packaging (2001) Executives’ Share Option Scheme (“Scheme”) was approved by the members of the

Company at an extraordinary general meeting held on 25 May 2001, which provide for the grant of incentive share options

to employees and Non-executive directors. The modifi cations to the Scheme were approved on 30 July 2007.

On April 2011, members of the Company approved, inter-alia, the extension of the Scheme for a further period of 10 years

from 25 May 2011.

As at the date of the report, the Scheme is administered by the Executive Resource and Compensation Committee which

comprises the following members:

Khong Heng Kin (Chairman)

Lye Thiam Fatt Joseph Victor (Member)

Salaerts Jozef (Member)

The details of options granted and exercised during the reporting year were as follows:

Aggregate Aggregate Aggregate

Options Options Options

Granted Exercised Lapsed

Options since since since Aggregate

Granted for Commence- Commence- Commence- Options

Financial ment of ment of ment of Outstanding

Year Scheme to Scheme to Scheme to as at

Name of Participants 31.12.2012 31.12.2012 31.12.2012 31.12.2012 31.12.2012

Directors of the Company

– Wang Gee Hock (a) – 3,000,000* (3,000,000) – –

– Tay Puan Siong (b) – 800,000 (800,000) – –

– Prof Tan Chin Tiong (c) – 800,000 (800,000) – –

– Assoc Prof Loh Han Tong (d) – 800,000 (800,000) – –

Executive offi cers

– Others** – 18,425,000 (14,175,000) (4,250,000) –

– 23,825,000 (19,575,000) (4,250,000) –

* Represents 5% or more of the total number of options available under the Scheme.

** Others include executive offi cers, resigned directors and offi cers of the Company and its subsidiaries.(a) Wang Gee Hock resigned on 14 November 2012.(b) Tay Puan Siong resigned on 14 November 2012.(c) Prof Tan Chin Tiong resigned on 8 January 2013.(d) Assoc Prof Loh Han Tong resigned on 29 February 2012 and was re-appointed to the board on 8 January 2013.

27


DIRECTORS’ REPORT

5. OPTIONS TO TAKE UP UNISSUED SHARES (Cont’d)

The maximum lifespan of the options granted under the Scheme is 10 years for executives, and 5 years for Non-executive

directors. There are no cash settlement alternatives. There are special provisions dealing with the lapsing or permitting the

earlier exercise of options under certain circumstances including termination, bankruptcy, and death of the participant.

The vesting period is two years. An option may be exercised in whole or in part, (i) after the fi rst anniversary of the

date of grant and if the subscription price is the market price; (ii) after the second anniversary of the date of grant if the

subscription price is at a discount to the market price.

During the reporting year, 1,600,000 and 11,450,000 ordinary shares of no par value were issued for cash at $0.0813 and

$0.063 respectively due to exercise of share options.

Since the commencement of the Scheme, no options have been granted to controlling shareholders of the Company or their

associates. No participant under the Scheme has been granted 5% or more of the total options available under the Scheme,

except as disclosed above. No options have been granted to directors and employees of the Company and its subsidiaries,

except as disclosed above.

During the reporting year, no option to take up unissued shares of the Company or any subsidiary was granted.

During the reporting year, there were no shares of the Company or any subsidiaries issued by virtue of the exercise of an

option to take up unissued shares except for those disclosed in the above paragraph.

At the end of the reporting year, there were no unissued shares of the Company or any subsidiary under option.

6. AUDIT COMMITTEE

The members of the Audit Committee at the date of this report are as follows:

Lye Thiam Fatt Joseph Victor (Chairman of Audit Committee and Lead Independent and Non-executive Director)

Khong Heng Kin (Independent and Non-executive Director)

Goh Hock Huat (Non-independent and Non-executive Director)

The Audit Committee performs the functions specifi ed by section 201B(5) of the Companies Act, Chapter 50. Among others,

it performed the following functions:

• Reviewed with the independent external auditors their audit plan;

• Reviewed with the independent external auditors their evaluation of the Company’s internal accounting control relevant

to their statutory audit, and their report on the fi nancial statements and the assistance given by the Company’s offi cers

to them;

• Reviewed with the internal auditors the scope and results of the internal audit procedures;

• Reviewed the fi nancial statements of the Group and the Company prior to their submission to the Directors of the

Company for adoption; and

• Reviewed the interested person transactions (as defi ned in Chapter 9 of the Listing Manual of Singapore Exchange

Securities Trading Limited).

Other functions performed by the Audit Committee are described in the report on corporate governance included in the

annual report and it includes an explanation of how independent auditor objectivity and independence is safeguarded when

the independent auditors provide non-audit services.

The Audit Committee has recommended to the Board of Directors that the independent auditors, RSM Chio Lim LLP, be

nominated for re-appointment as independent auditors at the next Annual General Meeting of the Company.

28


DIRECTORS’ REPORT

7. INDEPENDENT AUDITORS

The independent auditors, RSM Chio Lim LLP, have expressed their willingness to accept re-appointment.

8. SUBSEQUENT DEVELOPMENTS

There are no signifi cant developments subsequent to the release of the Group’s and the Company’s preliminary fi nancial

statements, as announced on 25 February 2013, which would materially affect the Group’s and the Company’s operating

and fi nancial performance as of the date of this report.

On Behalf of the Directors

Salaerts Jozef

Director

Goh Hock Huat

Director

8 March 2013

29


STATEMENT BY DIRECTORS

In the opinion of the Directors,

(a) the accompanying consolidated statements of profi t or loss and other comprehensive income, statements of fi nancial

position, statements of changes in equity, consolidated statement of cash fl ows, and notes thereto are drawn up so as to

give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2012 and of the results

and cash fl ows of the Group and changes in equity of the Company and of the Group for the reporting year then ended; and

(b) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and

when they fall due.

The Board of Directors approved and authorised these fi nancial statements for issue.

On Behalf of the Directors

Salaerts Jozef

Director

Goh Hock Huat

Director

8 March 2013

30


REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying fi nancial statements of Superior Multi-Packaging Limited and its subsidiaries (“the Group”),

which comprise the consolidated statement of fi nancial position of the Group and the statement of fi nancial position of the

Company as at 31 December 2012, and the consolidated statements of profi t or loss and other comprehensive income, statement

of changes in equity and statement of cash fl ows of the Group, and statement of changes in equity of the Company for the

reporting year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of the fi nancial statements that give a true and fair view in accordance with the

provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising

and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded

against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary

to permit the preparation of true and fair statements of profi t or loss and other comprehensive income and statements of fi nancial

position and to maintain accountability of assets.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our

audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of

the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation of fi nancial statements that give a true and fair view in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated fi nancial statements of the Group and the statement of fi nancial position and statement of changes

in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting

Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2012 and

of the results, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the reporting year

ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiaries

incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

RSM Chio Lim LLP

Public Accountants and Certifi ed Public Accountants

Singapore

8 March 2013

Partner in charge of audit: Lim Lee Meng

Effective from year ended 31 December 2010

INDEPENDENT AUDITORS’ REPORTTo the Members of SUPERIOR MULTI-PACKAGING LIMITED (Registration No: 197902249R)

31


Group

Notes 2012 2011

$’000 $’000

Revenue 5 157,698 161,360

Cost of sales (140,479) (143,582)

Gross profi t 17,219 17,778

Other items of income

Interest income 6 42 81

Other credits 7 3,160 4,032

Other items of expense

Distribution costs (5,957) (5,341)

Administrative expenses (10,970) (10,604)

Finance costs 8 (1,750) (1,780)

Other charges 7 (13,794) (1,431)

(Loss)/profi t before tax from continuing operations (12,050) 2,735

Income tax income/ (expense) 11 511 (514)

(Loss)/profi t from continuing operations, net of tax (11,539) 2,221

Loss from discontinued operations, net of tax 17 – (436)

(Loss)/profi t, net of tax (11,539) 1,785

Profi t attributable to:

Owners of the Parent

– (Loss)/profi t from continuing operations, net of tax (11,450) 2,264

– Loss from discontinued operations, net of tax – (452)

(Loss)/profi t for the year attributable to owners of the parent (11,450) 1,812

Non-controlling interests

– Loss from continuing operations, net of tax (89) (43)

– Profi t from discontinued operations, net of tax – 16

Loss for the year attributable to non-controlling interests (89) (27)


Earnings/(Loss) per share

Earnings/(Loss) per share currency unit Cents Cents

Continuing operations

Basic 13 (3.08) 0.62

Diluted 13 (3.05) 0.61

Discontinued operations

Basic 13 – (0.12)

Diluted 13 – (0.12)

Total

Basic 13 (3.08) 0.50

Diluted 13 (3.05) 0.49

CONSOLIDATED STATEMENT OF PROFIT OR LOSSYear Ended 31 December 2012

The accompanying notes form an integral part of these fi nancial statements.

32


Group

2012 2011

$’000 $’000


Other comprehensive (loss)/ income for the year, net of tax

Items that may be reclassifi ed subsequently to profi t or loss:

Exchange differences on translating foreign operations, net of tax (3,450) 2,256

Total comprehensive income for the year, net of tax (14,989) 4,041

Other comprehensive (loss)/ income for the year, net of tax

Owners of parent, net of tax (14,900) 4,068

Non-controlling interests, net of tax (89) (27)

Total comprehensive (loss)/income for the year, net of tax (14,989) 4,041

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEYear Ended 31 December 2012


33



Group Company

Notes 2012 2011 2012 2011

$’000 $’000 $’000 $’000

ASSETS

Non-current assets

Property, plant and equipment 14 44,763 53,311 13,179 15,239

Investments in subsidiaries 15 – – 49,206 50,797

Intangible assets 16 254 2,340 – –

Deferred tax assets 11 1,035 75 – –

Total non-current assets 46,052 55,726 62,385 66,036

Current assets

Assets of Disposal Group classifi ed as

held for sale 17 – 3,694 – 117

Inventories 18 29,068 38,384 12,206 16,256

Trade and other receivables 19 37,668 38,418 22,097 25,302

Other assets 21 4,652 6,441 245 297

Cash and cash equivalents 22 12,112 16,851 5,171 7,589

Total current assets 83,500 103,788 39,719 49,561

Total assets 129,552 159,514 102,104 115,597

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 23 56,965 55,619 56,965 55,619

Retained earnings 12,116 24,415 12,246 19,273

Other reserves 25 1,642 5,411 – 495

Reserve of Disposal Group classifi ed as

held for sale 17 – (119) – –

Equity attributable to owners of

the parent, total 70,723 85,326 69,211 75,387

Non-controlling interests (56) 33 – –

Total equity 70,667 85,359 69,211 75,387

Non-current liabilities

Deferred tax liabilities 11 699 1,268 667 1,236

Finance leases 28 – 6 – 6

Other fi nancial liabilities 27 11,825 14,687 11,825 14,687

Total non-current liabilities 12,524 15,961 12,492 15,929

Current liabilities

Liabilities of Disposal Group classifi ed as

held for sale 17 – 3,912 – –

Provisions 26 1,028 702 186 –

Income tax payable 236 125 – 50

Trade and other payables 29 24,894 30,403 11,421 15,042

Finance leases 28 6 75 6 75

Other fi nancial liabilities 27 20,197 22,977 8,788 9,114

Total current liabilities 46,361 58,194 20,401 24,281

Total liabilities 58,885 74,155 32,893 40,210

Total equity and liabilities 129,552 159,514 102,104 115,597

STATEMENTS OF FINANCIAL POSITIONAs at 31 December 2012

34


F

ore

ign

R

ese

rve

of

Sh

are

c

urr

en

cy

Dis

po

sa

l

Att

rib

uta

ble

N

on

-

Sh

are

S

tatu

tory

o

pti

on

tr

an

sla

tio

n

Gro

up

he

ld

Re

tain

ed

to

pa

ren

t c

on

tro

llin

g

To

tal

Gro

up

ca

pit

al

rese

rve

re

se

rve

re

se

rve

fo

r sa

le

ea

rnin

gs

su

b-t

ota

l in

tere

sts

e

qu

ity

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$

’00

0

$’0

00

$

’00

0

2012

Op

enin

g b

ala

nce a

t 1 J

anuary

2012

55,6

19

4,1

88

495

728

(119)

24

,41

5

85

,32

6

33

8

5,3

59

Mo

ve

me

nts

in

eq

uit

y:

Div

idend

s p

aid

(note

12)

–

–

–

–

–

(55

4)

(55

4)

–

(55

4)

Pro

ceed

s fro

m e

xerc

ise o

f share

op

tions

(n

ote

23)

851

–

–

–

–

–

85

1

–

85

1

Exerc

ise o

f share

op

tions (note

24)

495

–

(495)

–

–

–

–

–

–

Tota

l com

pre

hensiv

e in

com

e for

the y

ear

–

–

–

(3,4

50)

–

(11

,45

0)

(14

,90

0)

(89

) (1

4,9

89

)

Transfe

r from

reta

ined

earn

ings t

o

sta

tuto

ry r

eserv

es

–

176

–

–

–

(17

6)

–

–

–

Dis

posal o

f D

isp

osal G

roup

(note

17)

–

–

–

–

119

(11

9)

–

–

–

Clo

sin

g b

ala

nc

e a

t 31 D

ec

em

be

r 2012

56,9

65

4,3

64

–

(2,7

22)

–

12

,11

6

70

,72

3

(56

) 7

0,6

67

2011

Op

enin

g b

ala

nce a

t 1 J

anuary

2011

55,0

21

3,8

21

749

(1,6

47)

–

24

,03

2

81

,97

6

60

8

2,0

36

Mo

ve

me

nts

in

eq

uit

y:

Div

idend

s p

aid

(note

12)

–

–

–

–

–

(1,1

04

) (1

,10

4)

–

(1,1

04

)

Pro

ceed

s fro

m e

xerc

ise o

f share

op

tions

(n

ote

23)

386

–

–

–

–

–

38

6

–

38

6

Exerc

ise o

f share

op

tions (note

24)

212

–

(212)

–

–

–

–

–

–

Tota

l com

pre

hensiv

e in

com

e for

the y

ear

–

–

–

2,2

56

–

1,8

12

4

,06

8

(27

) 4

,04

1

Transfe

r from

share

op

tion r

eserv

e t

o

re

tain

ed

earn

ings (note

24)

–

–

(42)

–

–

42

–

–

–

Transfe

r from

reta

ined

earn

ings t

o

sta

tuto

ry r

eserv

es

–

367

–

–

–

(36

7)

–

–

–

Transfe

r to

Dis

posal G

roup

cla

ssifi

ed

as

held

for

sale

(note

17)

–

–

–

119

(119)

–

–

–

–

Clo

sin

g b

ala

nc

e a

t 31 D

ec

em

be

r 2011

55,6

19

4,1

88

495

728

(119)

24

,41

5

85

,32

6

33

8

5,3

59

STATEMENTS OF CHANGES IN EQUITYYear Ended 31 December 2012

The a

ccom

panyi

ng n

ote

s form

an in

tegra

l part

of th

ese fi n

ancia

l sta

tem

ents

.

35


Share

Share option Retained Total

Company capital reserve earnings equity

$’000 $’000 $’000 $’000

2012:

Opening balance at 1 January 2012 55,619 495 19,273 75,387

Movements in equity:

Dividends paid (note 12) – – (554) (554)

Proceeds from exercise of share options (note 23) 851 – – 851

Exercise of share options (note 24) 495 (495) – –

Total comprehensive loss for the year – – (6,473) (6,473)

Closing balance at 31 December 2012 56,965 – 12,246 69,211

2011:

Opening balance at 1 January 2011 55,021 749 19,003 74,773

Movements in equity:

Dividends paid (note 12) – – (1,104) (1,104)

Proceeds from exercise of share options (note 23) 386 – – 386

Exercise of share options (note 24) 212 (212) – –

Transfer from share option reserve to retained earnings (note 24) – (42) 42 –

Total comprehensive income for the year – – 1,332 1,332

Closing balance at 31 December 2011 55,619 495 19,273 75,387

STATEMENTS OF CHANGES IN EQUITYYear Ended 31 December 2012


36


2012 2011

$’000 $’000

Cash fl ows from operating activities

(Loss)/Profi t before tax from continuing operations (12,050) 2,735

Loss before tax from discontinued operations – (436)

(Loss)/profi t before tax (12,050) 2,299

Adjustments for:

Depreciation of property, plant and equipment 5,524 5,702

Amortisation of other intangible assets 15 21

Reversal of provision – (469)

Interest income (42) (81)

Interest expense 1,750 1,857

Loss on disposal of property, plant and equipment 15 13

Accelerated depreciation of cylinders, moulds and toolings 1,614 –

Impairment allowance on plant and equipment 4,793 75

Impairment allowance on intangible assets 2,071 –

Allowance for impairment on trade and other receivables 1,296 113

Inventories written down 3,611 574

Provisions 326 –

Re-measurement loss recognised on Disposal Group classifi ed as held for sale (note 17) – 877

Net effect of exchange rate changes in consolidating foreign operations (2,070) 992

Operating cash fl ows before changes in working capital 6,853 11,973

Changes in working capital, net of effects from acquisition and disposal of subsidiary:

Trade and other receivables (546) 1,073

Other assets 1,789 737

Inventories 5,705 228

Trade and other payables (5,509) 143

Net cash fl ows from operations before interest and tax 8,292 14,154

Income taxes paid (914) (1,224)

Net cash fl ows from operating activities 7,378 12,930

Cash fl ows from investing activities

Disposal of property, plant and equipment 398 388

Purchase of property, plant and equipment (5,487) (7,883)

Disposal of subsidiary, net of cash disposed (note 30) (248) –

Interest received 42 81

Net cash fl ows used in investing activities (5,295) (7,414)

Cash fl ows from fi nancing activities

Dividends paid to equity owners (554) (1,104)

Repayment of bank borrowings (28,087) (14,561)

Increase in new borrowings 22,445 14,126

Finance lease repayment (75) (76)

Net proceeds from share option exercise 851 386

Interest paid (1,750) (1,857)

Net cash fl ows used in fi nancing activities (7,170) (3,086)

Net (decrease)/increase in cash and cash equivalents (5,087) 2,430

Cash and cash equivalents, statement of cash fl ows, beginning balance 17,199 14,769

Cash and cash equivalents, statement of cash fl ows, ending balance (note 22A) 12,112 17,199

CONSOLIDATED STATEMENT OF CASH FLOWSYear Ended 31 December 2012


37


NOTES TO THE FINANCIAL STATEMENTS31 December 2012

1. GENERAL

The Company is incorporated in Singapore with limited liability. The fi nancial statements are presented in Singapore Dollars

and they cover the Company (referred to as “parent”) and the subsidiaries.

The Board of Directors approved and authorised these fi nancial statements for issue on the date of the statement by directors.

The principal activities of the Company consist of the manufacture and sale of metal containers and fl exible packaging

materials. It is listed on the Singapore Exchange Securities Trading Limited.

The principal activities of the subsidiaries consist of the manufacture and sale of metal containers, plastic pails and fl exible

packaging materials and the manufacture, fabrication and sale of stainless steel products, as disclosed in note 15 to the

fi nancial statements.

The registered offi ce is 80 Robinson Road #18-03, Singapore 068898.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Convention

The fi nancial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“FRS”) and

the related Interpretations to FRS (“INT FRS”) as issued by the Singapore Accounting Standards Council and the Companies

Act, Chapter 50. The fi nancial statements are prepared on a going concern basis under the historical cost convention

except where an FRS requires an alternative treatment (such as fair values) as disclosed where appropriate in these fi nancial

statements. Other comprehensive income comprises items of income and expense (including reclassifi cation adjustments)

that are not recognised in the income statement, as required or permitted by FRS. Reclassifi cation adjustments are amounts

reclassifi ed to profi t or loss in the income statement in the current period that were recognised in other comprehensive

income in the current or previous periods.

Basis of Presentation

The consolidated fi nancial statements include the fi nancial statements made up to the end of the reporting year of the

Company and all of its directly and indirectly controlled subsidiaries. The consolidated fi nancial statements are the fi nancial

statements of the Group presented as those of a single economic entity and are prepared using uniform accounting policies

for like transactions and other events in similar circumstances. All signifi cant intragroup balances and transactions, including

profi t or loss and other comprehensive income items and dividends are eliminated on consolidation. The results of any

subsidiaries acquired or disposed of during the reporting year are accounted for from the respective dates of acquisition or

up to the dates of disposal which effective control is obtained of the acquired business until that control ceases.

Changes in the Group’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within

equity as transactions with owners in their capacity as owners. The carrying amounts of the Group’s and non-controlling

interests are adjusted to refl ect the changes in their relative interests in the subsidiary. When the Group loses control of a

subsidiary it derecognises the assets and liabilities and related equity components of the former subsidiary. Any gain or loss

is recognised in profi t or loss. Any investment retained in the former subsidiary is measured at its fair value at the date when

control is lost and is subsequently accounted as available-for-sale fi nancial assets in accordance with FRS 39.

The Company’s fi nancial statements have been prepared on the same basis, and as permitted by the Companies Act,

Chapter 50, no statement of income is presented for the Company.

38



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Basis of Preparation of the Financial Statements

The preparation of fi nancial statements in conformity with generally accepted accounting principles requires the

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the fi nancial statements and the reported amounts of revenues and

expenses during the reporting year. Actual results could differ from those estimates. The estimates and assumptions are

reviewed on an ongoing basis. Apart from those involving estimations, management has made judgements in the process

of applying the entity’s accounting policies. The areas requiring management’s most diffi cult, subjective or complex

judgements, or areas where assumptions and estimates are signifi cant to the fi nancial statements, are disclosed at the

end of this footnote, where applicable.

Revenue Recognition

The revenue amount is the fair value of the consideration received or receivable from the gross infl ow of economic benefi ts

during the reporting year arising from the course of the activities of the entity and it is shown net of any related sales

taxes, estimated returns and rebates. Revenue from the sale of goods is recognised when signifi cant risks and rewards of

ownership are transferred to the buyer, there is neither continuing managerial involvement to the degree usually associated

with ownership nor effective control over the goods sold, and the amount of revenue and the costs incurred or to be incurred

in respect of the transaction can be measured reliably. Interest is recognised using the effective interest method.

Employee Benefi ts

Certain subsidiaries operate a defi ned contribution provident fund scheme, in which employees are entitled to join upon fulfi lling

certain conditions. The assets of the fund are held separately from those of the entity in an independently administered fund.

The entity contributes an amount equal to a fi xed percentage of the salary of each participating employee. Contributions

are charged to profi t or loss in the period to which they relate. This plan is in addition to the contributions to government

managed retirement benefi t plans such as the Central Provident Fund in Singapore which specifi es the employer’s obligations

which are dealt with as defi ned contribution retirement benefi t plans. For employee leave entitlement, the expected cost of

short-term employee benefi ts in the form of compensated absences is recognised in the case of accumulating compensated

absences, when the employees render service that increases their entitlement to future compensated absences; and in the

case of non-accumulating compensated absences, when the absences occur. A liability for bonuses is recognised where

the entity is contractually obliged or where there is constructive obligation based on past practice.

Pursuant to the relevant regulations of the People’s Republic of China (“PRC”) government, the subsidiaries in the PRC have

participated in a local municipal government retirement benefi ts scheme, whereby the subsidiaries in the PRC are required

to contribute to a certain percentage to the basic salaries of its employees to this scheme to fund their retirement benefi ts.

The local municipal government undertakes to assume the retirement benefi ts obligations of those employees of the Group.

Pursuant to the relevant regulations of India, gratuity shall be paid to an employee on the termination of his employment after

the employees have rendered continuous service of not less than 5 years. As the subsidiary in India is incorporated in 2010,

no provision for gratuity is required.

Share-Based Compensation

For the equity-settled share-based compensation transactions, the fair value of the employee services received in exchange

for the grant of the options is recognised as an expense. The total amount to be expensed on a straight-line basis over

the vesting period is determined by reference to the fair value of the options granted excluding the effect of non-market

conditions such as profi tability and sales growth targets. Non-market vesting conditions are included in assumptions about

the number of options that are expected to become exercisable. Fair value is measured using an option pricing model. The

expected lives used in the model are adjusted, based on management’s best estimate, for the effects of non-transferability,

exercise restrictions and behavioural considerations. At each end of the reporting year, a revision is made on the number of

options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the

profi t or loss, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction

costs are credited to share capital when the options are exercised. Cancellations of grants of equity instruments during the

vesting period (other than a grant cancelled by forfeiture when the vesting conditions are not satisfi ed) are accounted for

as an acceleration of vesting, therefore any amount unrecognised that would otherwise have been charged is recognised

immediately in profi t or loss.

39




Income Tax

The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or

refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have

been recognised in the fi nancial statements or tax returns. The measurements of current and deferred tax liabilities and

assets are based on provisions of the enacted or substantially enacted tax laws; the effects of future changes in tax laws

or rates are not anticipated. Income tax expense represents the sum of the tax currently payable and deferred tax. Current

and deferred income taxes are recognised as income or as an expense in profi t or loss unless the tax relates to items that

are recognised in the same or a different period outside profi t or loss. For such items recognised outside profi t or loss, the

current tax and deferred tax are recognised (a) in other comprehensive income if the tax is related to an item recognised in

other comprehensive income and (b) directly in equity if the tax is related to an item recognised directly in equity. Deferred

tax assets and liabilities are offset when they relate to income taxes levied by the same income tax authority. The carrying

amount of deferred tax assets is reviewed at each end of the reporting year and is reduced, if necessary, by the amount of

any tax benefi ts that, based on available evidence, are not expected to be realised. A deferred tax amount is recognised

for all temporary differences, unless the deferred tax amount arises from the initial recognition of an asset or liability in a

transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profi t

nor taxable profi t (tax loss). A deferred tax liability or asset is recognised for all taxable temporary differences associated

with investments in subsidiaries, branches and associates, and interests in joint ventures except where the reporting entity

is able to control the timing of the reversal of the taxable temporary differences and it is probable that the taxable temporary

differences will not reverse in the foreseeable future or for deductible temporary differences, they will not reverse in the

foreseeable future and they cannot be utilised against taxable profi ts.

Foreign Currency Transactions

The functional currency is the Singapore Dollar as it refl ects the primary economic environment in which the entity operates.

Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates of the transactions.

At each end of the reporting year, recorded monetary balances and balances measured at fair value that are denominated

in non-functional currencies are reported at the rates ruling at the end of the reporting year and fair value dates respectively.

All realised and unrealised exchange adjustment gains and losses are dealt with in profi t or loss except when recognised in

other comprehensive income and if applicable deferred in equity such as for qualifying cash fl ow hedges. The presentation

is in the functional currency.

Translation of Financial Statements of Other Entities

Each entity in the Group determines the appropriate functional currency as it refl ects the primary economic environment in

which the relevant reporting entity operates. In translating the fi nancial statements of such an entity for incorporation in the

consolidated fi nancial statements in the presentation currency the assets and liabilities denominated in other currencies are

translated at end of the reporting year rates of exchange and the income and expense items for each statement presenting

profi t or loss and other comprehensive income are translated at average rates of exchange for the reporting year. The

resulting translation adjustments (if any) are recognised in other comprehensive income and accumulated in a separate

component of equity until the disposal of that relevant reporting entity.

The direct method is used whereby the fi nancial statements of the foreign operations are translated directly into the functional

currency of the parent Company.

Borrowing Costs

All borrowing costs that are interest and other costs incurred in connection with the borrowing of funds. Borrowing costs that

are directly attributable to the acquisition, construction or production of a qualifying asset that necessarily take a substantial

period of time to get ready for their intended use or sale are capitalised as part of the cost of that asset until substantially

all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. Other borrowing costs

are recognised as an expense in the period in which they are incurred. The interest expense is calculated using the effective

interest rate method.

40




Property, Plant and Equipment

Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their residual values

over their estimated useful lives of each part of an item of these assets. The annual rates of depreciation are as follows:

Leasehold buildings and land use rights – 1.67% to 5% per annum

Plant and equipment – 6.67% to 10% per annum

Depreciation is not provided for assets under construction.

An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle.

Fully depreciated assets still in use are retained in the fi nancial statements.

Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any accumulated

depreciation and any accumulated impairment losses. The gain or loss arising from the derecognition of an item of property,

plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of

the item and is recognised in profi t or loss. The residual value and the useful life of an asset is reviewed at least at each end of

the reporting year and, if expectations differ signifi cantly from previous estimates, the changes are accounted for as a change

in an accounting estimate, and the depreciation charge for the current and future periods are adjusted.

Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the asset to

the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent

cost is recognised as an asset only when it is probable that future economic benefi ts associated with the item will fl ow to

the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profi t or loss

when they are incurred.

Leases

Whether an arrangement is, or contains, a lease, it is based on the substance of the arrangement at the inception date, that

is, whether (a) fulfi lment of the arrangement is dependent on the use of a specifi c asset or assets (the asset); and (b) the

arrangement conveys a right to use the asset. Leases are classifi ed as fi nance leases if substantially all the risks and rewards

of ownership are transferred to the lessee. All other leases are classifi ed as operating leases. At the commencement of the

lease term, a fi nance lease is recognised as an asset and as a liability in the statement of fi nancial position at amounts equal

to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the

inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest

rate implicit in the lease, if this is practicable to determine, the lessee’s incremental borrowing rate is used. Any initial direct

costs of the lessee are added to the amount recognised as an asset. The excess of the lease payments over the recorded

lease liability are treated as fi nance charges which are allocated to each reporting year during the lease term so as to produce

a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in

the reporting year in which they are incurred. The assets are depreciated as owned depreciable assets. Leases where the

lessor effectively retains substantially all the risks and benefi ts of ownership of the leased assets are classifi ed as operating

leases. For operating leases, lease payments are recognised as an expense in profi t or loss on a straight-line basis over the

term of the relevant lease unless another systematic basis is representative of the time pattern of the user’s benefi t, even if

the payments are not on that basis. Lease incentives received are recognised in profi t or loss as an integral part of the total

lease expense.

41




Intangible Assets

An identifi able non-monetary asset without physical substance is recognised as an intangible asset at acquisition cost

if it is probable that the expected future economic benefi ts that are attributable to the asset will fl ow to the entity and

the cost of the asset can be measured reliably. This also applies to an internally generated intangible asset. Research

expenditure is expensed when incurred. Development cost incurred relating to the design and testing of new or improved

products are recognised as intangible assets when it is probable that the project will be viable considering its commercial

and technical feasibility and its costs can be measured reliably and there are suffi cient resources to complete development.

Where no internally generated intangible asset can be recognised, development cost is expensed when incurred. After

initial recognition, an intangible asset with fi nite useful life is carried at cost less any accumulated amortisation and any

accumulated impairment losses. An intangible asset with an indefi nite useful life is not amortised. An intangible asset is

regarded as having an indefi nite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable

limit to the period over which the asset is expected to generate net cash infl ows for the entity.

The amortisable amount of an intangible asset with fi nite useful life is allocated on a systematic basis over the best estimate

of its useful life from the point at which the asset is ready for use. The useful lives are as follows:

License − 20 years

Identifi able intangible assets acquired as part of a business combination are initially recognised separately from goodwill

if the asset’s fair value can be measured reliably, irrespective of whether the asset had been recognised by the acquiree

before the business combination. An intangible asset is considered identifi able only if it is separable or if it arises from

contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from

other rights and obligations.

Segment Reporting

The Group discloses fi nancial and descriptive information about its reportable segments. Reportable segments are

operating segments or aggregations of operating segments that meet specifi ed criteria. Operating segments are

components about which separate fi nancial information is available that is evaluated regularly by the chief operating

decision maker in deciding how to allocate resources and in assessing performance. Generally, fi nancial information is

reported on the same basis as is used internally for evaluating operating segment performance and deciding how to

allocate resources to operating segments.

Subsidiaries

A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the Group. Control is the

power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities accompanying

a shareholding of more than one half of the voting rights or the ability to appoint or remove the majority of the members

of the Board of Directors or to cast the majority of votes at meetings of the Board of Directors. The existence and effect

of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group

controls another entity.

In the Company’s own separate fi nancial statements, an investment in a subsidiary is accounted for at cost less any allowance

for impairment in value adjusted for any changes in the contingent consideration. Impairment loss recognised in profi t or

loss for a subsidiary is reversed only if there has been a change in the estimates used to determine the asset’s recoverable

amount since the last impairment loss was recognised. The net book value of a subsidiary is not necessarily indicative of the

amounts that would be realised in a current market.

Business Combinations

Business combinations are accounted for by applying the acquisition method. There were none during the reporting year.

42




Non-controlling Interests

The non-controlling interests in the net assets and net results of a consolidated subsidiary are shown separately in the

appropriate components of the consolidated fi nancial statements. For each business combination, any non-controlling

interest in the acquiree (subsidiary) is initially measured either at fair value or at the non-controlling interest’s proportionate

share of the acquiree’s identifi able net assets. Where the non-controlling interest is measured at fair value, the valuation

techniques and key model inputs used are disclosed in the relevant note. Profi t or loss and each component of other

comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive

income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling

interests having a defi cit balance.

Impairment of Non-Financial Assets

Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same time every

year on an intangible asset with an indefi nite useful life or an intangible asset not yet available for use. The carrying amount

of other non-fi nancial assets is reviewed at each end of the reporting year for indications of impairment and where an asset

is impaired, it is written down through profi t or loss to its estimated recoverable amount. The impairment loss is the excess

of the carrying amount over the recoverable amount and is recognised in profi t or loss. The recoverable amount of an asset

or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. When the fair value less costs to

sell method is used, any available recent market transactions are taken into consideration. When the value in use method is

adopted, in assessing the value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax

discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. For the

purposes of assessing impairment, assets are Grouped at the lowest levels for which there are separately identifi able cash

fl ows (cash-generating units). At each end of the reporting year non-fi nancial assets other than goodwill with impairment

loss recognised in prior periods are assessed for possible reversal of the impairment. An impairment loss is reversed only to

the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of

depreciation or amortisation, if no impairment loss had been recognised.

Goodwill

Goodwill is recognised as of the acquisition date measured as the excess of (a) over (b); (a) being the aggregate of: (i) the

consideration transferred which generally requires acquisition date fair value; (ii) the amount of any non-controlling interest

in the acquiree measured in accordance with FRS 103 (measured either at fair value or as the non-controlling interest’s

proportionate share of the acquiree’s net identifi able assets); and (iii) in a business combination achieved in stages, the

acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree; and (b) being the net of the

acquisition date amounts of the identifi able assets acquired and the liabilities assumed measured in accordance with this

FRS 103.

After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment

losses. Goodwill is not amortised. Irrespective of whether there is any indication of impairment, goodwill (and also an

intangible asset with an indefi nite useful life or an intangible asset not yet available for use) are tested for impairment, at least

annually. Goodwill impairment is not reversible in any circumstances.

For the purpose of impairment testing and since the acquisition date of the business combination, goodwill is allocated

to each cash-generating unit, or Groups of cash-generating units that are expected to benefi t from the synergies of the

combination, irrespective of whether other assets or liabilities of the acquiree were assigned to those units or Groups of units.

Each unit or Group of units to which the goodwill is allocated represent the lowest level within the entity at which the goodwill

is monitored for internal management purposes and is not larger than a segment.

43




Assets Classifi ed as Held for Sale

Identifi able assets, liabilities and contingent liabilities and any disposal Groups are classifi ed as held for sale if their carrying

amount is to be recovered principally through a sale transaction rather than through continuing use. It can include a subsidiary

acquired exclusively with a view to resale. Assets that meet the criteria to be classifi ed as held for sale are measured at the

lower of carrying amount and fair value less costs to sell and are presented separately on the face of the statement of fi nancial

position. Once an asset is classifi ed as held for sale or included in a Group of assets held for sale no further depreciation

or amortisation is recorded. Impairment losses on initial classifi cation of the balances as held for sale are included in profi t

or loss, even when there is a revaluation. The same applies to gains and losses on subsequent remeasurement. The

depreciation on depreciable assets is ceased.

In addition, the results of discontinued operations are presented separately in profi t or loss. A discontinued operation is a

component of the business that represents a separate major line of business or geographical area of operations that has

been sold, or classifi ed as held for sale or has been abandoned. They are shown separately in profi t or loss to classify them

from continuing to discontinued operations.

Inventories

Inventories are measured at the lower of cost (weighted average) and net realisable value. Net realisable value is the estimated

selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary

to make the sale. A write down on cost is made for where the cost is not recoverable or if the selling prices have declined.

Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present

location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of

overheads based on normal operating capacity.

Financial Assets

Initial recognition, measurement and derecognition:

A fi nancial asset is recognised on the statement of fi nancial position when, and only when, the entity becomes a party to

the contractual provisions of the instrument. The initial recognition of fi nancial assets is at fair value normally represented by

the transaction price. The transaction price for fi nancial asset not classifi ed at fair value through profi t or loss includes the

transaction costs that are directly attributable to the acquisition or issue of the fi nancial asset. Transaction costs incurred

on the acquisition or issue of fi nancial assets classifi ed at fair value through profi t or loss are expensed immediately. The

transactions are recorded at the trade date.

Irrespective of the legal form of the transactions performed, fi nancial assets are derecognised when they pass the “substance

over form” based on the derecognition test prescribed by FRS 39 relating to the transfer of risks and rewards of ownership

and the transfer of control.

44




Financial Assets (cont’d)

Subsequent measurement:

Subsequent measurement based on the classifi cation of the fi nancial assets in one of the following four categories under

FRS 39 is as follows:

1. Financial assets at fair value through profi t or loss: As at end of the reporting year date, there were no fi nancial assets

classifi ed in this category.

2. Loans and receivables: Loans and receivables are non-derivative fi nancial assets with fi xed or determinable

payments that are not quoted in an active market. Assets that are for sale immediately or in the near term are not

classifi ed in this category. These assets are carried at amortised costs using the effective interest method (except

that short-duration receivables with no stated interest rate are normally measured at original invoice amount unless

the effect of imputing interest would be signifi cant) minus any reduction (directly or through the use of an allowance

account) for impairment or uncollectibility. Impairment charges are provided only when there is objective evidence

that an impairment loss has been incurred as a result of one or more events that occurred after the initial recognition

of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash fl ows of

the fi nancial asset or Group of fi nancial assets that can be reliably estimated. The methodology ensures that an

impairment loss is not recognised on the initial recognition of an asset. Losses expected as a result of future events,

no matter how likely, are not recognised. For impairment, the carrying amount of the asset is reduced through use

of an allowance account. The amount of the loss is recognised in profi t or loss. An impairment loss is reversed if

the reversal can be related objectively to an event occurring after the impairment loss was recognised. Typically the

trade and other receivables are classifi ed in this category.

3. Held-to-maturity fi nancial assets: As at end of the reporting year, there were no fi nancial assets classifi ed in this category.

4. Available-for-sale fi nancial assets: As at end of the reporting year, there were no fi nancial assets classifi ed in this category.

Cash and Cash Equivalents

Cash and cash equivalents include bank and cash balances, on demand deposits and any highly liquid debt instruments

purchased with an original maturity of three months or less. For the statement of cash fl ows, the item includes cash and

cash equivalents less cash subject to restriction and bank overdrafts payable on demand that form an integral part of cash

management.

Financial Liabilities

Initial recognition, measurement and derecognition:

A fi nancial liability is recognised on the statement of fi nancial position when, and only when, the entity becomes a party to the

contractual provisions of the instrument and it is derecognised when the obligation specifi ed in the contract is discharged or

cancelled or expired. The initial recognition of fi nancial liability is at fair value normally represented by the transaction price.

The transaction price for fi nancial liability not classifi ed at fair value through profi t or loss includes the transaction costs that

are directly attributable to the acquisition or issue of the fi nancial liability. Transaction costs incurred on the acquisition or

issue of fi nancial liability classifi ed at fair value through profi t or loss are expensed immediately. The transactions are recorded

at the trade date. Financial liabilities including bank and other borrowings are classifi ed as current liabilities unless there is an

unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting year.

45




Financial Liabilities (cont’d)

Subsequent measurement:

Subsequent measurement based on the classifi cation of the fi nancial liabilities in one of the following two categories under

FRS 39 is as follows:

1. Liabilities at fair value through profi t or loss: Liabilities are classifi ed in this category when they are incurred principally

for the purpose of selling or repurchasing in the near term (trading liabilities) or are derivatives (except for a derivative

that is a designated and effective hedging instrument) or have been classifi ed in this category because the conditions

are met to use the “fair value option” and it is used. Financial guarantee contracts if signifi cant are initially recognised

at fair value and are subsequently measured at the greater of (a) the amount determined in accordance with FRS 37

and (b) the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance

with FRS 18. All changes in fair value relating to liabilities at fair value through profi t or loss are charged to profi t or

loss as incurred.

2. Other fi nancial liabilities: All liabilities, which have not been classifi ed as in the previous category fall into this residual

category. These liabilities are carried at amortised cost using the effective interest method. Trade and other payables

and borrowings are usually classifi ed in this category. Items classifi ed within current trade and other payables are not

usually re-measured, as the obligation is usually known with a high degree of certainty and settlement is short-term.

Fair Value of Financial Instruments

The carrying values of current fi nancial instruments approximate their fair values due to the short-term maturity of these

instruments and the disclosures of fair value are not made when the carrying amount of current fi nancial instruments is

a reasonable approximation of the fair value. The fair values of non-current fi nancial instruments may not be disclosed

separately unless there are signifi cant differences at the end of the reporting year and in the event the fair values are

disclosed in the relevant notes. The fair value of a fi nancial instrument is derived from an active market or by using an

acceptable valuation technique. The appropriate quoted market price for an asset held or liability to be issued is usually

the current bid price without any deduction for transaction costs that may be incurred on sale or other disposal and, for an

asset to be acquired or liability held, the asking price. If there is no market, or the markets available are not active, the fair

value is established by using an acceptable valuation technique. The fair value measurements are classifi ed using a fair value

hierarchy of 3 levels that refl ects the signifi cance of the inputs used in making the measurements, that is, Level 1 for the

use of quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 for the use of inputs other than

quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly

(i.e., derived from prices); and Level 3 for the use of inputs for the asset or liability that are not based on observable market

data (unobservable inputs). The level is determined on the basis of the lowest level input that is signifi cant to the fair value

measurement in its entirety. Where observable inputs that require signifi cant adjustment based on unobservable inputs, that

measurement is a Level 3 measurement. The maximum exposure to credit risk is: the total of the fair value of the fi nancial

assets; the maximum amount the entity could have to pay if the guarantee is called on; and the full amount of any payable

commitments at the end of the reporting year.

Equity

Equity instruments are contracts that give a residual interest in the net assets of the Company. Ordinary shares are classifi ed

as equity. Equity instruments are recognised at the amount of proceeds received net of incremental costs directly attributable

to the transaction. Dividends on equity are recognised as liabilities when they are declared. Interim dividends are recognised

when declared by the directors.

46




Provisions

A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past event. It is

probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation. A provision is made using best estimates of the amount required in

settlement and where the effect of the time value of money is material, the amount recognised is the present value of the

expenditures expected to be required to settle the obligation using a pre-tax rate that refl ects current market assessments

of the time value of money and the risks specifi c to the obligation. The increase in the provision due to passage of time is

recognised as interest expense. Changes in estimates are refl ected in profi t or loss in the period they occur.

Government Grants

A government grant is recognised at fair value when there is reasonable assurance that the conditions attaching to it will be

complied with and that the grant will be received. A grant in recognition of specifi c expenses is recognised as income over

the periods necessary to match them with the related costs that they are intended to compensate, on a systematic basis.

A grant related to depreciable assets is allocated to income over the period in which such assets are used in the project

subsidised by the grant.

Critical Judgements, Assumptions and Estimation Uncertainties

The critical judgements made in the process of applying the accounting policies that have the most signifi cant effect on the

amounts recognised in the fi nancial statements and the key assumptions concerning the future, and other key sources of

estimation uncertainty at the end of the reporting year, that have a signifi cant risk of causing a material adjustment to the

carrying amounts of assets and liabilities currently or within the next reporting year are discussed below. These estimates

and assumptions are periodically monitored to ensure they incorporate all relevant information available at the date when

fi nancial statements are prepared. However, this does not prevent actual fi gures differing from estimates.

Estimated impairment of goodwill

An assessment is made annually whether goodwill has suffered any impairment loss, based on the recoverable amounts

of the cash-generating units (“CGU”). The recoverable amounts of the CGUs was determined based on value-in-use

calculations and these calculations require the use of estimates in relation to future cash fl ows and suitable discount rates

as disclosed in note 16.

Allowance for doubtful accounts

An allowance is made for doubtful trade accounts for estimated losses resulting from the subsequent inability of the customers

to make required payments. If the fi nancial conditions of the customers were to deteriorate, resulting in an impairment of

their ability to make payments, additional allowances may be required in future periods. Management generally analyses

trade receivables and historical bad debts, customer concentrations, and customer creditworthiness when evaluating the

adequacy of the allowance for doubtful trade receivables. To the extent that it is feasible impairment and uncollectibility

is determined individually for each item. In cases where that process is not feasible, a collective evaluation of impairment

is performed. At the end of the reporting year, the trade receivables carrying amount approximates the fair value and the

carrying amounts might change materially within the next reporting year but these changes would not arise from assumptions

or other sources of estimation uncertainty at the end of the reporting year. The carrying amount is disclosed in note 19 on

trade and other receivables.

Net realisable value of inventories

A review is made periodically on inventory for excess inventory, obsolescence and declines in net realisable value below cost

and an allowance is recorded against the inventory balance for any such declines. These reviews require Management to

estimate future demand for the products. In any case the realisable value represents the best estimate of the recoverable

amount and is based on the most reliable evidence available at the end of the reporting year and inherently involves estimates

regarding the future expected realisable value. The usual considerations for determining the amount of allowance or write-

down include ageing analysis, technical assessment and subsequent events. In general, such an evaluation process requires

signifi cant judgement and materially affects the carrying amount of inventories at the end of the reporting year. Possible

changes in these estimates could result in revisions to the valuation of inventory. The carrying amount of inventories at the

end of the reporting year was $29,068,000 (2011: $38,384,000).

47




Critical Judgements, Assumptions and Estimation Uncertainties (cont’d)

Income tax expense

The entity recognises tax liabilities and assets tax based on an estimation of the likely taxes due, which requires signifi cant

judgement as to the ultimate tax determination of certain items. Where the actual amount arising from these issues differs

from these estimates, such differences will have an impact on income tax and deferred tax amounts in the period when such

determination is made. The income tax amounts are disclosed in note 11.

Deferred tax estimation

Management judgement is required in determining the amount of current and deferred tax recognised as income or expense

and the extent to which deferred tax assets can be recognised. A deferred tax asset is recognised if it is more likely than

not that suffi cient taxable income will be available in the future against which the temporary differences and unused tax

losses can be utilised. Management also considers future taxable income and tax planning strategies in assessing whether

deferred tax assets should be recognised in order to refl ect changed circumstances as well as tax regulations. As a result,

due to their inherent nature, it is likely that deferred tax calculation relates to complex fact patterns for which assessments

of likelihood are judgmental and not susceptible to precise determination. The balances recorded and unrecognised are

disclosed in note 11.

Property, plant and equipment

An assessment is made at each reporting date on whether there is any indication that the asset may be impaired. If any

such indication exists, an estimate is made of the recoverable amount of the asset. The recoverable amounts of cash-

generating units have been determined based on value-in-use calculations. These calculations require the use of estimates.

It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on existing knowledge,

that outcomes within the next reporting year that are different from assumptions could require a material adjustment to the

carrying amount of the balances affected. The carrying amount of the class of assets at the end of the reporting year affected

by the assumption is $44,763,000 (2011: $53,311,000).

Useful lives of plant and equipment

The estimates for the useful lives and related depreciation charges for plant and equipment is based on commercial and

production factors which could change signifi cantly as a result of innovations and in response to market conditions. The

depreciation charge is increased where useful lives are less than previously estimated lives, or the carrying amounts written

off or written down for technically obsolete items or assets that have been abandoned. It is impracticable to disclose the

extent of the possible effects. It is reasonably possible, based on existing knowledge, that outcomes within the next reporting

year that are different from assumptions could require a material adjustment to the carrying amount of the balances affected.

The carrying amount of the class of assets affected by the assumption is $18,830,000 (2011: $26,904,000).

Estimated impairment of subsidiary

When a subsidiary is in net equity defi cit or has suffered losses a test is made on whether the investment in the investee has

suffered any impairment, in accordance with the stated accounting policy. This determination requires signifi cant judgement.

An estimate is made of the future profi tability of the investee, and the fi nancial health of and near-term business outlook

for the investee, including factors such as industry and sector performance, and operational and fi nancing cash fl ows. It

is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on existing knowledge, that

outcomes within the next reporting year that are different from assumptions could require a material adjustment to the

carrying amount of the asset affected. The carrying amount of the specifi c assets affected by the assumption is $28,072,000

(2011: $24,833,000).

48



3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

FRS 24 defi nes a related party as a person or entity that is related to the reporting entity and it includes (a) A person or a

close member of that person’s family if that person: (i) has control or joint control over the reporting entity; (ii) has signifi cant

infl uence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or of a parent

of the reporting entity; (b) An entity is related to the reporting entity if any of the following conditions apply: (i) The entity and

the reporting entity are members of the same Group; (ii) One entity is an associate or joint venture of the other entity; (iii)

Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity

is an associate of the third entity; (v) The entity is a post-employment benefi t plan for the benefi t of employees of either the

reporting entity or an entity related to the reporting entity; (vi) The entity is controlled or jointly controlled by a person identifi ed

in (a); or (vii) A person identifi ed in (a)(i) has signifi cant infl uence over the entity or is a member of the key management

personnel of the entity (or of a parent of the entity).

3A. Related companies

The Company became a subsidiary of CROWN Speciality Packaging Investment Pte Ltd, incorporated in Singapore, on

28 November 2012. The company’s ultimate parent company is Crown Holdings, Inc., incorporated in United States of

America, which is listed on the New York Stock Exchange. Related companies in these fi nancial statements include the

members of the parent’s group of companies.

There are transactions and arrangements between the Company and members of the Group and the effects of these on

the basis determined between the parties are refl ected in these fi nancial statements. The current intercompany balances are

unsecured without fi xed repayment terms and interest unless stated otherwise. For any signifi cant non-current balances and

signifi cant fi nancial guarantees, an interest or charge is charged or imputed unless stated otherwise.

Intragroup transactions and balances that have been eliminated in these consolidated fi nancial statements are not disclosed

as related party transactions and balances under this note.

3B. Other related parties

There are transactions and arrangements between the reporting entity and related parties and the effects of these on the

basis determined between the parties are refl ected in these fi nancial statements. The current related party balances are

unsecured without fi xed repayment terms and interest unless stated otherwise.

Signifi cant related party transactions

In addition to transactions and balances disclosed elsewhere in the notes to the fi nancial statements, these items include

the following:

Other related parties

2012 2011

$’000 $’000

Group

Sale of goods – 6,305

Company

Sale of goods – 664

49



3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (cont’d)

3C. Key management compensation

Group and Company

2012 2011

$’000 $’000

Salaries and other short-term employee benefi ts 1,557 1,542

The above amounts are included under employee benefi ts expense. Included in the above amounts are the following items:

2012 2011

$’000 $’000

Remuneration of Directors of the Company 877 772

Fees to Directors of the Company 263 263

During the reporting year, three of the former Directors of the Company exercised their share options for 3,600,000

ordinary shares of the Company at prices of $0.063 and $0.0813. A total cash consideration of $256,000 was paid to

the Company (note 24B).

Further information about the remuneration of individual Directors is provided in the report on corporate governance.

Key management personnel are directors and those persons having authority and responsibility for planning, directing and

controlling the activities of the Company, directly or indirectly. The above amounts for key management compensation are

for all the directors and other key management personnel.

3D. Commitments and contingencies

As at 31 December 2012, the Company has contingent liabilities of $7,401,000 (2011: $9,959,000) in respect of guarantees

issued in connection with banking facilities granted to subsidiaries.

4. FINANCIAL INFORMATION BY SEGMENTS

4A. Information about reportable segment profi t or loss, assets and liabilities

Disclosure of information about operating segments, products and services, the geographical areas, and the major customers

are made as required by FRS 108 Operating Segments. This disclosure standard has no impact on the reported results or

fi nancial position of the Group.

For management purposes, the Group is organised into one operating segment – Packaging Products, which involves the

manufacturing of metal containers and fl exible packaging materials.

Such a structural organisation is determined by the nature of risks and returns associated with each business segment and

defi ne the management structure as well as the internal reporting system. It represents the basis on which the Management

reports the primary segment information. Operating segments are managed separately because each business requires

different strategies.

Inter-segment sales, if any, would be measured on the basis that the entity actually used to price the transfers. Internal

transfer pricing policies of the Group are, as far as practicable, based on market prices. The accounting policies of the

operating segments are the same as those described in the summary of signifi cant accounting policies.

The management reporting system evaluates performances based on a number of factors. However, the primary profi tability

measurement to evaluate segment’s operating results comprises two major fi nancial indicators: (1) earnings from operations

before depreciation, amortisation, interests and income taxes (called “Recurring EBITDA”) and (2) remain operating results

before income taxes.

50



4. FINANCIAL INFORMATION BY SEGMENTS (cont’d)

4A. Information about reportable segment profi t or loss, assets and liabilities (cont’d)

As disclosed in note 17 to the fi nancial statements, the Company entered into a sale and purchase agreement with a related

party to dispose of its entire 96.3% shareholding in Hoover Stainless Pte Ltd (“Hoover Singapore Disposal”) in reporting year

ended 31 December 2011. In connection with the Hoover Singapore Disposal, Hoover Stainless Pte Ltd has also entered

into a sale and purchase agreement with an external party to dispose the entire issued and paid up share capital of Shanghai

Hoover Stainless Steel Co., Ltd (“Hoover Shanghai Disposal”). The Hoover Singapore Disposal and the Hoover Shanghai

Disposal are collectively known as the “Disposal Group” in the 2011’s segment results.

Consequently, the results of the Disposal Group are recorded under “Discontinued Operations” in reporting year ended

31 December 2011.

The following tables illustrate the information about the reportable segment profi t or loss, assets and liabilities.

The information on each product and service, or each Group of similar products and services is not available and the cost

to develop it would be excessive.

4B. Profi t or loss from operations and reconciliations

Packaging

products

$’000

2012

Revenue by segment

External revenue 157,698

Recurring EBITDA (before impairment of assets) 8,582

Depreciation (5,524)

Amortisation (15)

Allowance for impairment of plant and equipment (4,793)

Accelerated depreciation of cylinders, moulds and toolings (1,614)

Impairment of intangible assets (2,071)

Allowance for impairment of trade and other receivables (1,296)

Allowance for impairment of inventories (3,611)

Interest income 42

Interest expense (1,750)

Loss before tax from continuing operations (12,050)

Income tax expense 511

Loss, net of tax (11,539)

51




4B. Profi t or loss from operations and reconciliations (cont’d)

Packaging Discontinued

products operations Group

$’000 $’000 $’000

2011

Revenue by segment

External revenue 161,360 6,881 168,241

Recurring EBITDA (before impairment of assets) 11,675 (238) 11,437

Depreciation (5,581) (121) (5,702)

Amortisation (21) – (21)

Allowance for impairment of plant and equipment (75) – (75)

Allowance for impairment of trade and other receivables (113) – (113)

Allowance for impairment of inventories (574) – (574)

Interest income 81 – 81

Interest expense (1,780) (77) (1,857)

Profi t/(Loss) before tax from continuing operations 3,612 (436) 3,176

Re-measurement loss recognised on Disposal Group classifi ed as

held for sale (note 17) (877)

Income tax expense (514)

Profi t, net of tax 1,785

4C. Assets and reconciliations



$’000 $’000 $’000

2012

Total assets for reportable segments 129,552 – 129,552

2011

Total assets for reportable segments 155,820 3,694 159,514

4D. Liabilities and reconciliations



$’000 $’000 $’000

2012

Total liabilities for reportable segments 58,885 – 58,885

2011

Total liabilities for reportable segments 70,243 3,912 74,155

52




4E. Other material items and reconciliations



$’000 $’000 $’000

Expenditures for non-current assets

2012 5,487 – 5,487

2011 7,869 14 7,883

4F. Geographical information

The following table provides an analysis of the revenue by geographical market based on the locations of the end customers,

irrespective of the origin of the goods/ services:

Revenue Non-current assets

Group 2012 2011 2012 2011

$’000 $’000 $’000 $’000

Singapore 63,128 71,671 13,179 17,320

China 77,018 79,372 30,661 39,541

ASEAN (other than Singapore) 9,890 8,493 746 772

Others 7,662 8,705 431 526

Discontinued operations – (6,881) – (2,508)

157,698 161,360 45,017 55,651

Revenues are attributed to countries on the basis of the customer’s location. The non-current assets are analysed by the

geographical area in which the assets are located. The non-current assets exclude any fi nancial instruments and deferred

tax assets.

4G. Information about major customers

Group

2012 2011

$’000 $’000

Top 1 customer in packaging products segment 52,798 53,434

Top 2 customers in packaging products segment 73,390 71,564

Top 3 customers in packaging products segment 83,045 82,766

5. REVENUE

Group

2012 2011

$’000 $’000

Sale of packaging products 157,698 161,360

6. INTEREST INCOME

Group

2012 2011

$’000 $’000

Interest income from banks 42 81

53



7. OTHER CREDITS AND (OTHER CHARGES)

Group

2012 2011

$’000 $’000

Allowance for impairment on trade and other receivables (1,296) (113)

Commission income 58 3

Compensation received – 288

Foreign exchange adjustment losses (312) (509)

Loss on disposal of plant and equipment (15) (13)

Gain on sale of raw materials and scrap materials 2,815 3,167

Government incentive 170 15

Inventories written down (3,611) (574)

Inventories written off (82) (147)

Impairment allowance on plant and equipment (4,793) (75)

Accelerated depreciation of cylinders, moulds and toolings (1,614) –

Impairment of intangible assets (2,071) –

Reversal of provision (note 26) – 469

Others 117 90

(10,634) 2,601

Presented in the profi t or loss as:

Other credits 3,160 4,032

Other charges (13,794) (1,431)

Net (10,634) 2,601

8. FINANCE COSTS

Group

2012 2011

$’000 $’000

Interest expense 1,750 1,780

9. EMPLOYEE BENEFITS EXPENSE

Group

2012 2011

$’000 $’000

Employee benefi ts expense 16,972 16,081

Contributions to defi ned contribution plans 2,203 2,404

Other benefi ts 1,674 1,326

Total employee benefi ts expense 20,849 19,811

Included in:

Cost of sales 12,742 12,230

Distribution costs 2,400 2,018

Administrative expenses 5,707 5,563

20,849 19,811

54



10. ITEMS IN PROFIT OR LOSS

In addition to the charges and credits disclosed elsewhere in the notes to the fi nancial statements, this item includes the

following charges:

Group

2012 2011

$’000 $’000

Audit fees to the independent auditors of the Company 166 169

Audit fees to other independent auditors 162 156

Non-audit fees to the independent auditors of the Company 30 20

Non-audit fees to other independent auditors 13 5

11. INCOME TAX

11A. Components of tax expense recognised in profi t or loss include:

Group

2012 2011

$’000 $’000

Current tax expense

Current tax expense 1,303 1,309

Over adjustments to tax in respect of prior periods (285) (355)

1,018 954

Deferred tax income

Deferred tax income (1,529) (440)

Total income tax (income)/expense (511) 514

The income tax expense varied from the amount of income tax expense determined by applying the Singapore income tax

rate of 17% (2011: 17%) to profi t before income tax as a result of the following differences:

Group

2012 2011

$’000 $’000

(Loss)/Profi t before tax from continuing operations (12,050) 2,735

Income tax (income)/expense at the above rate (2,048) 465

Not deductible items 2,179 417

Effect of different tax rates in different countries (301) 159

Income tax exemption from foreign subsidiaries (52) (25)

Tax exemptions (9) (108)

Over adjustments to tax in respect of prior periods (285) (355)

Other minor items less than 3% each 5 (39)

Total income tax (income)/expense (511) 514

There are no income tax consequences of dividends to owners of the Company.

The amount of income taxes outstanding as at the end of the reporting year was $236,000 (2011: $125,000). Such an

amount is net of tax advances, which according to tax rules, were paid before the end of the reporting year.

55



11. INCOME TAX (cont’d)

11B. Deferred tax expense recognised in profi t or loss include:

Group

2012 2011

$’000 $’000

Deferred tax income arising from excess of net book value of property, plant and

equipment over tax values (537) (440)

Deferred tax income arising from provisions (960) –

Deferred tax expense arising from excess of tax values over net book value of property,

plant and equipment – 23

Tax loss carry forwards utilised – 420

Unrecognised deferred tax assets (32) (443)

Total deferred tax income (1,529) (440)

11C. Deferred tax balance in the statement of fi nancial position:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Excess of net book value of property, plant and

equipment over tax values (699) (1,236) (667) (1,236)

Deferred tax assets arising from provisions 1,035 75 – –

Unrecognised deferred tax assets – (32) – –

336 (1,193) (667) (1,236)

Presented in the statement of fi nancial position as follows:

Deferred tax liabilities (699) (1,268) (667) (1,236)

Deferred tax assets 1,035 75 – –

Net balance 336 (1,193) (667) (1,236)

It is impracticable to estimate the amount expected to be settled or used within one year.

At the end of the reporting year, the aggregate amount of temporary differences associated with investments in subsidiaries

in China for which deferred tax liabilities have not been recognised was $567,000 (2011: $546,000). No liability has been

recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the

temporary differences and it is probable that such differences will not reverse in the foreseeable future. Temporary differences

arising in connection with interests in subsidiaries are insignifi cant.

No deferred tax asset has been recognised in respect of the unused tax losses in certain subsidiaries in China due to the

uncertainty of its recoverability. Included in unrecognised tax losses are losses of $8,021,300 (2011: $3,575,300) that will

expire between 2013 and 2017. Other losses may be carried forward indefi nitely.

For the Singapore companies, the realisation of the future income tax benefi ts from tax losses carry forward and temporary

differences from capital allowances is available for an unlimited future period, subject to the conditions imposed by law

including the retention of majority shareholders as defi ned.

56



12. DIVIDENDS ON EQUITY SHARES

Rate per share – Cents Group and Company

2012 2011 2012 2011

$’000 $’000

Final Dividend paid net of income tax 0.15 0.30 554 1,104

13. EARNINGS/(LOSS) PER SHARE

The following table illustrates the numerators and denominators used to calculate basic and diluted earnings/(loss) per share.

Group

2012 2011

$’000 $’000

A. Numerators: (loss)/earnings attributable to equity holders:

– Continuing operations: attributable to equity holders (11,450) 2,264

– Discontinued operations: Loss for the year – (452)

B. Total basic (loss)/earnings (11,450) 1,812

C. Diluted (loss)/earnings (11,450) 1,812

D. Denominators: weighted average number of equity shares

Basic 372,190 367,876

Dilutive share options effect 3,637 3,302

Diluted 375,827 371,178

The weighted average number of equity shares refers to shares in circulation during the reporting period.

The dilutive effect derives from transactions such as exercise of share options (see note 24).

Basic earnings per share are computed based on the weighted average number of ordinary shares outstanding during

each reporting year. The diluted earnings per share is based on the weighted average number of ordinary shares and

dilutive ordinary share equivalents outstanding during each reporting year. The ordinary share equivalents included in these

calculations are: (1) the average number of ordinary shares assumed to be outstanding during the reporting year and (2)

shares of ordinary share issuable upon assumed exercise of share options which (if any) would have a dilutive effect.

57



14. PROPERTY, PLANT AND EQUIPMENT

Assets

Land use Leasehold Plant and under

Group rights buildings equipment construction Total

$’000 $’000 $’000 $’000 $’000

Cost

At 1 January 2011 4,704 29,732 72,895 6,794 114,125

Foreign exchange adjustments 168 380 1,357 241 2,146

Transferred to Disposal Group classifi ed

as held for sale (179) (3,768) (1,157) – (5,104)

Additions – 548 7,273 62 7,883

Disposals – – (699) – ( 699)

Transfers 5 5,164 444 (5,613) –

At 31 December 2011 4,698 32,056 80,113 1,484 118,351

Foreign exchange adjustments (239) (878) (1,841) (14) (2,972)

Additions – 450 3,834 1,203 5,487

Disposals – – (1,617) – (1,617)

Transfers – – 268 (268) –

At 31 December 2012 4,459 31,628 80,757 2,405 119,249

Accumulated depreciation

At 1 January 2011 779 11,441 49,073 – 61,293

Foreign exchange adjustments 27 123 714 – 864

Depreciation for the year 165 827 4,710 – 5,702

Transferred to Disposal Group classifi ed

as held for sale (136) (1,395) (1,065) – (2,596)

Disposals – – (223) – (223)

At 31 December 2011 835 10,996 53,209 – 65,040

Foreign exchange adjustments (33) (131) (1,087) – (1,251)

Depreciation for the year 153 677 6,308 – 7,138

Disposals – (22) (1,212) – (1,234)

Impairment for the year – 84 4,709 – 4,793

At 31 December 2012 955 11,604 61,927 – 74,486

Net book value

At 1 January 2011 3,925 18,291 23,822 6,794 52,832

At 31 December 2011 3,863 21,060 26,904 1,484 53,311

At 31 December 2012 3,504 20,024 18,830 2,405 44,763

The land use rights are for the land of the industrial buildings owned by certain subsidiaries in China. They are amortised on

a straight-line method over their lease term. The land use rights expire between 2019 and 2059 and are not transferable.

Certain items of property, plant and equipment are pledged as security for bank facilities (see note 27).

58



14. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Assets

Leasehold Plant and under

Company building equipment construction Total

$’000 $’000 $’000 $’000

Cost

At 1 January 2011 14,249 40,204 808 55,261

Additions 143 1,589 – 1,732

Disposals – (29) – (29)

Transfer 808 – (808) –

At 31 December 2011 15,200 41,764 – 56,964

Additions 200 1,528 – 1,728

Disposals – (1,024) – (1,024)

At 31 December 2012 15,400 42,268 – 57,668

Accumulated depreciation

At 1 January 2011 5,736 33,595 – 39,331

Depreciation for the year 384 2,039 – 2,423

Disposals – (29) – (29)

At 31 December 2011 6,120 35,605 – 41,725

Depreciation for the year 345 3,296 – 3,641

Disposals – (985) – (985)

Impairment for the year – 108 – 108

At 31 December 2012 6,465 38,024 – 44,489

Net book value

At 1 January 2011 8,513 6,609 808 15,930

At 31 December 2011 9,080 6,159 – 15,239

At 31 December 2012 8,935 4,244 – 13,179

The depreciation expense is charged as follows:

Cost of Distribution Administrative Other

sales expenses expenses Charges Total

$’000 $’000 $’000 $’000 $’000

Group

2012 4,767 41 716 1,614 7,138

2011 4,589 34 1,079 – 5,702

Company

2012 2,118 – 199 1,324 3,641

2011 2,115 – 308 – 2,423

Certain items under plant and equipment are under fi nance lease agreements (note 28).

59



15. INVESTMENTS IN SUBSIDIARIES

Company

2012 2011

$’000 $’000

Cost at the beginning of the year 64,645 62,277

Disposal of subsidiaries (8,849) –

Increase in investment in subsidiaries – 2,368

Less: Allowance for impairment (6,590) (13,731)

Balance at end of the year 49,206 50,914

Presented in statements of fi nancial position:

Investments in subsidiaries, non-current 49,206 50,797

Assets of Disposal Group classifi ed as held for sale (note 17) – 117

49,206 50,914

Net book value of subsidiaries 55,844 62,118

Analysis of above amount denominated in non-functional currency:

United States Dollar 55,296 55,296

Singapore Dollar 500 9,349

55,796 64,645

Movements in allowance for impairment:

Balance at beginning of the year 13,731 13,031

Disposal of subsidiaries (8,732) –

Impairment loss charged to profi t or loss 1,591 700

Balance at end of the year 6,590 13,731

The Management recognised allowance for impairment of $1.59 million on the cost of investments of two of the subsidiaries

of the Company for the reporting year. Impairment tests on the carrying value of investment in the subsidiaries were carried

out and the Management had written down the cost of investments for the subsidiaries to the recoverable amounts of

the subsidiaries determined by value-in-use calculations. The key assumptions for the value-in-use calculations are those

regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period.

Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The subsidiaries have suffered from a fall in demand in sales. Accordingly, it was necessary to provide for an impairment loss.

The subsidiaries held by the Company and the Group are listed below:

Effective

percentage

Cost of of equity held

Name of subsidiary, country of incorporation, investments by Group

place of operations and principal activities (and Auditors) 2012 2011 2012 2011

$’000 $’000 % %

Held by the Company:

Hoover Stainless Pte Ltd (b) (c) – 8,849 – 96.3

Singapore

Manufacture, fabrication and sale of stainless steel products

(RSM Chio Lim LLP)

60



15. INVESTMENTS IN SUBSIDIARIES (cont’d)

Effective

percentage




$’000 $’000 % %

Kunshan Huade Metal Packaging Container Co., Ltd (a) 1,539 1,539 100 100

People’s Republic of China

Production of metal containers

(BDO China Shu Lun Pan CPAs)

Langfang Huade Metal Packaging Container Co., Ltd (b) 17,445 17,445 100 100


Customised metal printing

(RSM China CPAs)

Superior (Langfang) Multi-Packaging Co., Ltd (b) 4,163 4,163 100 100



(RSM China CPAs)

Superior (Tianjin) Multi-Packaging Co., Ltd (b) 8,119 8,119 100 100



(RSM China CPAs)

Superior Metal Printing (Huiyang) Co., Ltd (b) 3,647 3,647 100 100



(RSM China CPAs)

Superior Precision Moulds & Packaging Container (Shanghai) Co., Ltd (a) 8,499 8,499 100 100




Neo Tech Packaging (Shanghai) Co., Ltd (a) 3,426 3,426 95 95


Production of laminated metal plate


Guangzhou Superior Multi-Packaging Co., Ltd (b) 2,005 2,005 100 100



(RSM China CPAs)

Superior Metal Printing Phils., Inc (b) 1,000 1,000 100 100

The Philippines

Sale of packaging and metal containers

(Alas, Oplas & Co., CPAs)

61



15. INVESTMENTS IN SUBSIDIARIES (cont’d)

Effective

percentage




$’000 $’000 % %

Superior Multi-Packaging (Vietnam) Co., Ltd (b) 3,288 3,288 100 100

Vietnam

Production of metal containers and plastic pails

(RSM DTL Auditing Company)

Superior (Chengdu) Multi-Packaging Co., Ltd (a) 2,165 2,165 100 100




Superior Investments Holdings Pte Ltd 500 500 100 100

Singapore

Investment holding company

(RSM Chio Lim LLP)

Held through Hoover Stainless Pte Ltd:

Shanghai Hoover Stainless Steel Co., Ltd (a) (c) – 2,714 – 96.3


Manufacture, fabrication and sale of stainless steel products


Held through Superior Precision Moulds & Packaging Container

(Shanghai) Co., Ltd:

Zhejiang Gaote Metal Decorating Co., Ltd (a) 1,772 1,772 100 100


Customised metal printing


Held through Superior Investments Holdings Pte Ltd:

Superior Cans & Pails Containers (Pune) Pvt. Ltd (a) 1,545 1,545 100 100

India


(Vijay D. Kendhe & Co. Chartered Accountants)

(a) Other independent auditors. Audited by fi rms of accountants other than member fi rms of RSM International of which

RSM Chio Lim LLP in Singapore is a member. Their names are indicated above.

(b) Audited by member fi rms of RSM International of which RSM Chio Lim LLP in Singapore is a member.

(c) These subsidiaries were disposed in 2012 (note 17). In 2011, the cost of investment after allowance for impairment in

Hoover Stainless Pte Ltd of $117,000 was classifi ed under current assets in the statement of fi nancial position of the

Company as the subsidiary was disposed subsequent to the end of the reporting year ended 31 December 2011 as

disclosed in note 17 to the fi nancial statements.

As required by Rule 716 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Audit Committee

and the Board of Directors of the Company have satisfi ed themselves that the appointment of different auditors for certain of

its overseas subsidiaries would not compromise the standard and effectiveness of the audit of the Group.

62



16. INTANGIBLE ASSETS

Group

2012 2011

$’000 $’000

Goodwill (note 16A) – 2,071

Other intangible assets (note 16B) 254 269

254 2,340

16A. Goodwill

Group

2012 2011

$’000 $’000

Cost

At beginning and end of the year 2,071 2,071

Accumulated impairment:

Balance at beginning of the year – –

Impairment loss recognised in the year included in other charges (note 7) (2,071) –

Balance at end of the year (2,071) –

Net book value at end of the year – –

Goodwill is allocated to cash-generating units (“CGU”) for the purpose of impairment testing. Goodwill in those CGUs is

represented by the Group’s investment in each subsidiary as follows:

Group

Packaging products 2012 2011

$’000 $’000

Name of subsidiaries

Langfang Huade Metal Packaging Container Co., Ltd (“LFHD”) – 1,176

Zhejiang Gaote Metal Decorating Co., Ltd. (“ZGMD”) – 895

Net book value at end of the year – 2,071

The goodwill was tested for impairment at the end of the reporting year. An impairment loss is the amount by which the

carrying amount of an asset or a CGU exceeds its recoverable amount. The recoverable amount of an asset or a CGU is the

higher of its fair value less costs to sell or its value-in-use. The recoverable amounts of CGUs have been determined based

on the value-in-use method. The value is regarded as the lowest level for fair value measurement as the valuation includes

inputs for the asset that are not based on observable market data (unobservable inputs).

The value in use was determined by the Management. The key assumptions for the value-in-use calculations are the

discount rates, growth rates and expected changes to selling prices and direct costs during the period. The Management

estimates discount rates using pre-tax rates that refl ect current market assessments of the time value of money and the

risks specifi c to the CGUs. The growth rates are based on industry growth forecasts and Management’s expectations of

the entities’ earnings potential. Changes in selling prices and direct costs are based on past practices and expectations of

future changes in the market.

LFHD: LFHD and Superior (Langfang) Multi-Packaging Co., Ltd (“SMPLF”) mainly supply printed tinplates and component

parts to another related company – Superior (Tianjin) Multi-Packaging Co., Ltd (“SMPTJ”). An impairment test based on the

forecasted revenues and profi ts of the three entities has been carried out for the current reporting year ended 31 December

2012. The Management has considered the three entities as a single CGU and prepared budgeted forecasts for the reporting

year ending 31 December 2013 on this basis.

63



16. INTANGIBLE ASSETS (cont’d)

16A. Goodwill (cont’d)

The value-in-use was determined by the Management. The key assumptions for the value-in-use calculations are as follows:

2012 2011

LFHD SMPLF SMPTJ LFHD SMPLF SMPTJ

Growth rates based on industry 5.0% 5.0% 5.0% 6.0% 2.0% 6.0%

growth forecasts and not exceeding

the average long-term growth rate

for the relevant markets

Estimated discount rates using 12.7% 12.7% 12.7% 11.0% 11.0% 11.0%

pre-tax rates that refl ect current

market assessments at the risks

specifi c to the CGUs

Cash fl ow forecasts derived from the 5 years 5 years 5 years 5 years 5 years 5 years

most recent fi nancial budgets

approved by the Management

In 2012, the CGU suffered from a fall in demand in sales. Based on the cash fl ow forecasts, the impairment test resulted

in the recognition of an impairment loss on the goodwill of $1.17 million in LFHD. The impairment loss relates to the entire

goodwill of the CGU.

ZGMD: ZGMD was acquired with the intention to integrate its metal printing facilities into the Group’s existing forming and

assembly operations in metal containers packaging business. As ZGMD mainly supplies printed tinplates to another related

company – Superior Precision Moulds & Packaging Container (Shanghai) Co., Ltd (“SMPSH”) which in turn sells to third

parties, an impairment test based on the forecasted revenue of the two entities has been carried out for the current reporting

year ended 31 December 2012. The impairment test has been carried out using a discounted cash fl ow unlevered model

covering a 5 years period. The Management has considered these two entities as a single CGU and prepared budgeted

forecasts for reporting year ending 31 December 2013 on this basis.

The value-in-use was determined by the Management. The key assumptions for the value-in-use calculations are as follows:

2012 2011

ZGMD SMPSH ZGMD SMPSH

Growth rates based on industry growth forecasts and not 6.0% 6.0% 3.0% 3.0%

exceeding the average long-term growth rate for the

relevant markets

Estimated discount rates using pre-tax rates that refl ect 12.7% 12.7% 11.0% 11.0%

current market assessments at the risks specifi c to

the CGUs

Cash fl ow forecasts derived from the most recent fi nancial 5 years 5 years 5 years 5 years

budgets approved by the Management

In 2012, the CGU suffered from a fall in demand in sales. Based on the cash fl ow forecasts, the impairment test resulted

in the recognition of an impairment loss on the goodwill of $0.89 million in ZGMD. The impairment loss relates to the entire

goodwill of the CGU.

64



16. INTANGIBLE ASSETS (cont’d)

16B. Other intangible assets

Group License

$’000

Cost

At 1 January 2011, 31 December 2011 and 31 December 2012 290

Accumulated amortisation

At 1 January 2011 –

Amortisation for the year 21

At 31 December 2011 21

Amortisation for the year 15


Net book value

At 1 January 2011 290



17. DISCONTINUED OPERATIONS OF DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE

On 14 February 2012, the Company entered into a sale and purchase agreement with a related party to dispose of its

entire 96.3% shareholding in Hoover Stainless Pte Ltd (“HSPL”) for a consideration of $100,000 (the “Hoover Singapore

Disposal”). In connection with the Hoover Singapore Disposal, HSPL had also on 13 February 2012 entered into a share

transfer agreement with an external party to dispose its entire 100% shareholding in Shanghai Hoover for a consideration

of RMB 5.5 million, equivalent to $1,068,000 (the “Hoover Shanghai Disposal”). The Hoover Singapore Disposal and the

Hoover Shanghai Disposal are collectively known as the “Disposal Group”. The disposal was planned in 2011. The sale was

completed on 7 May 2012.

The results of the Disposal Group were as follows:

2011

$’000

Revenue 6,881

Expenses (6,363)

Profi t from operations 518

Finance costs (77)

Loss recognised on re-measurement to fair value less costs to sell (877)

Loss before tax from discontinued operations (436)

Income tax expense –

Loss from discontinued operations, net of tax (436)

A loss of $877,000 arose from the disposal, being the consideration receivable on disposal less the carrying amount of the

subsidiary’s net assets. No tax charge or credit arose from the transaction.

65



17. DISCONTINUED OPERATIONS OF DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE (cont’d)

The following table summarises the carrying value of the account balances of the Disposal Group classifi ed as held for sale

in the previous reporting year.

2011

$’000

Assets:

Property, plant and equipment 1,631

Investment 10

Inventories 162

Other assets 1,078

Trade and other receivables 465

Cash and short term deposits 348

Assets of Disposal Group classifi ed as held for sale 3,694

Liabilities:

Trade and other payables 1,612

Short term loan 2,300

Liabilities of Disposal Group classifi ed as held for sale 3,912

Net liabilities of Disposal Group classifi ed as held for sale (218)

Reserve:

Foreign currency translation reserve 119

The short term loan undertaken by the Disposal Group is secured over a corporate guarantee provided by the Company.

The cash fl ows of the discontinued operations were included in the consolidated fi nancial statements for the reporting year

ended 31 December 2011, were as follows:

2011

$’000

Operating cash fl ows 3,302

Investing activities (14)

Financing activities (4,151)

Total cash fl ows (863)

66



18. INVENTORIES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Finished goods and goods for resale 6,610 8,712 3,741 5,290

Work in progress 3,045 3,354 2,142 2,031

Raw materials and consumables 19,413 26,318 6,323 8,935

29,068 38,384 12,206 16,256

Inventories are stated after allowance for impairment.

Movements in allowance for impairment:

Balance at beginning of the year 1,886 1,671 1,342 955

Charged to profi t or loss included in other charges 3,611 574 1,410 473

Transferred to Disposal Group classifi ed as held for sale – (296) – –

Amounts written off (350) (63) (296) (86)

Balance at end of the year 5,147 1,886 2,456 1,342

Included in cost of sales:

Changes – decrease in inventories of fi nished goods and

work in progress 1,606 1,580 633 225

Raw materials and consumables used 112,504 116,913 51,948 54,918

Certain inventories are pledged as security for the bank facilities (note 27).

19. TRADE AND OTHER RECEIVABLES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade receivables

External parties 36,656 36,411 16,857 18,398

Less: Allowance for impairment (1,335) (417) (100) (100)

Subsidiaries (note 3) – – 2,831 2,902

Less: Allowance for impairment – – (1,294) (1,100)

Sub-total 35,321 35,994 18,294 20,100

Other receivables

Subsidiaries (note 3) – – 5,012 5,148

Less: Allowance for impairment – – (2,541) –

Other receivables 2,503 2,424 1,332 54

Less: Allowance for impairment (156) – – –

Sub-total 2,347 2,424 3,803 5,202

Total trade and other receivables 37,668 38,418 22,097 25,302

Movements in allowance for impairment of trade

and other receivables

Balance at beginning of the year 417 376 1,200 1,189

Charged to profi t or loss included in other charges 1,296 113 2,735 11

Transferred to Disposal Group classifi ed as held for sale – (32) – –

Used (222) (40) – –

Balance at end of the year 1,491 417 3,935 1,200

The allowance is based on individual accounts that are determined to be impaired at the year end date. These are not secured.

67



20. OTHER FINANCIAL ASSETS

Group

2012 2011

$’000 $’000

Investments at fair value through profi t or loss

Balance at beginning of the year – 10

Reclassifi ed to assets of Disposal Group classifi ed as held for sale (note 17) – (10)

Balance at end of the year – –

21. OTHER ASSETS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Deposits to secure services 372 333 161 198

Prepayments 244 342 84 63

Advances for purchase of plant and equipment 788 752 – –

Advances to suppliers 3,246 4,973 – –

Advances to staff 2 – – –

Club memberships – 41 – 36

4,652 6,441 245 297

The carrying value of club memberships is stated at cost. The fair value of the club memberships is deemed to be not

reliably measurable as the probabilities of the various estimates within the range cannot be reasonably assessed as used in

estimating fair values. Consequently, it is carried at cost less allowance for impairment.

22. CASH AND CASH EQUIVALENTS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Not restricted in use 12,112 16,851 5,171 7,589

Interest earning balances 12,085 16,793 5,144 7,579

The interest rates for the cash balances on interest earning accounts are between 0.02% to 3.76% (2011: 0.02% to 3.78%)

receivable from monthly to yearly basis.

22A. Cash and cash equivalents in the consolidated statement of cash fl ows

Group

2012 2011

$’000 $’000

Cash and cash equivalents as shown above 12,112 16,851

Cash and cash equivalents classifi ed as Disposal Group held for sale (note 17) – 348

Cash and cash equivalents at end of the year 12,112 17,199

68



23. SHARE CAPITAL

2012 2011

Issued Issued

Number share Number share

Group and Company of shares capital of shares capital

’000 $’000 ’000 $’000

Ordinary shares of no par value

Balance at beginning of the year 369,656 55,619 363,756 55,021

Proceeds from exercise of share options 13,050 851 5,900 386

Transfer from share option reserve to share capital

(note 24C) – 495 – 212

Balance at end of the year 382,706 56,965 369,656 55,619

The ordinary shares of no par value which are fully paid, carry one vote each and have no right to fi xed income. The Company

is not subject to any externally imposed capital requirements.

During the reporting year, 13,050,000 ordinary shares of no par value were issued for cash at $851,000 due to exercise of

share options.

Capital management

The objectives when managing capital are: to safeguard the reporting entity’s ability to continue as a going concern, so

that it can continue to provide returns for owners and benefi ts for other stakeholders, and to provide an adequate return to

owners by pricing the sales commensurately with the level of risk. The management sets the amount of capital to meet its

requirements and the risk taken. There were no changes in the approach to capital management during the reporting year.

The management manages the capital structure and makes adjustments to it where necessary or possible in the light of

changes in conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure,

the management may adjust the amount of dividends paid to owners, return capital to owners, issue new shares, or sell

assets to reduce debt. Adjusted capital comprises all components of equity (that is, share capital and reserves).

The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net

debt / adjusted capital (as shown below). Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain its listing on the Singapore Exchange Securities Trading Limited it has to have share capital with a

free fl oat of at least 10% of the shares. The Company met the capital requirement on its initial listing and the rules limiting

treasury share purchases mean it will automatically continue to satisfy that requirement, as it did throughout the reporting

year. Management receives a report from the share registrars frequently on substantial share interests showing the non-free

fl oat to ensure continuing compliance with the 10% limit throughout the reporting year.

69



23. SHARE CAPITAL (cont’d)

Capital management (cont’d)

The Management does not set a target level of gearing but uses capital opportunistically to support its business and to add

value for shareholders. The key discipline adopted is to widen the margin between the return on capital employed and the

cost of that capital.

Group

2012 2011

$’000 $’000

Net debts

All current and non-current borrowings including fi nance leases 32,028 37,745

Less: Cash and cash equivalents (12,112) (16,851)

19,916 20,894

Net capital

Equity 70,667 85,359

Debt-to-adjusted capital ratio 28.2% 24.5%

The increase in the debt-to-adjusted capital ratio for the reporting year resulted primarily from the decrease in

retained earnings.

24. SHARE BASED PAYMENT

24A. Share options – The Scheme

The Company has an employee share option scheme known as the “The Superior Multi-Packaging (2001) Executives’ Share

Option Scheme” (the “Scheme”). The Scheme was approved by the shareholders on 25 May 2001. At an Extraordinary

General Meeting on 30 July 2007, shareholders approved the modifi cations to the Scheme.

Under the rules of the Scheme, any full time employee of the Company or its subsidiaries holding the rank of Executive

Offi cer (or an equivalent or analogous rank) and above (including Non-executive Directors) selected by the Executive

Resource and Compensation Committee (“ERC”) are eligible to participate in the Scheme. Controlling shareholders or their

associates are also eligible to participate in the Scheme subject to the approval of independent shareholders in the form

of separate resolutions for each participant. Further, independent shareholders’ approval is also required in the form of

separate resolutions for each grant of options and the terms thereof, to each participant who is a controlling shareholder or

his associate.

The total number of shares over which options may be granted shall not exceed 15% of the issued share capital of the

Company at any time.

The Scheme is administered by the ERC, which consists of 3 Directors appointed by the Board of Directors of the Company.

The number of options to be offered to a participant shall be determined at the discretion of the ERC, who shall take into

account criteria such as the performance of the Company and the Group, provided that the total number of shares which

may be offered to any participant during the entire operation of the Scheme (including adjustments under the rules) shall not

exceed 15% of the total number of issued shares at any time.

The ERC may at its discretion fi x the exercise price at (i) a price (the “Market Price”) equal to the average of the last

dealt prices for a share on Singapore Exchange Securities Trading Limited for a period of fi ve (5) consecutive market days

immediately prior to the relevant offer date; or (ii) a price which is set at a discount to the Market Price, provided that the

maximum discount shall not exceed 20% of the Market Price. The discount will have to be approved by shareholders in a

separate resolution at an Extraordinary General Meeting.

70



24. SHARE BASED PAYMENT (cont’d)

24A. Share options – The Scheme (cont’d)

The maximum lifespan of the options granted under the Scheme is 10 years for executives, and 5 years for Non-executive

Directors. There are no cash settlement alternatives. There are special provisions dealing with the lapsing or permitting the

earlier exercise of options under certain circumstances including termination, bankruptcy, and death of the participant. The

vesting period is two years. An option may be exercised in whole or in part, (i) after the fi rst anniversary of the date of grant

and if the subscription price is the Market Price; and (ii) after the second anniversary of the date of grant if the subscription

price is at a discount to the Market Price.

On 29 April 2011, members of the Company approved, inter-alia, the extension of the Scheme for a further period of

10 years from 25 May 2011.

24B. Activities under the share options scheme

The outstanding number of options at the end of the year was:

Number of shares

options at 31 December

Exercise price Grant date Exercise period 2012 2011

$0.0813 4 September 2007 From 4 September 2009 to 3 September 2012 – 1,600,000

$0.063 4 September 2007 From 4 September 2009 to 3 September 2017 – 12,150,000

Balance at end of the year – 13,750,000

The table below summarises the number of options that were outstanding and their weighted average exercise price as at

the end of the year as well as the movements during the year.

Number of Weighted average

share options exercise price

2012 2011 2012 2011

Outstanding at 1 January 13,750,000 19,750,000 $0.07 $0.11

Forfeited (700,000) (100,000) $0.06 $0.06

Exercise of share options (13,050,000) (5,900,000) $0.07 $0.07

Outstanding at 31 December – 13,750,000 – $0.07

Exercisable at 31 December – 13,750,000 – $0.07

The share options under the Scheme had been fully vested as at 3 September 2009.

There was no option granted during the year.

71



24. SHARE BASED PAYMENT (cont’d)

24B. Activities under the share options scheme (cont’d)

The following table summarises the information on Directors’ outstanding share options at 31 December 2012:

Grants Exercised

from start of from start of

Grants scheme to scheme to Balance at

in 2012 end of 2012 end of 2012 31 Dec 2012

Participants

Directors of the Company

Wang Gee Hock (a) – 3,000,000 (3,000,000) –

Prof Tan Chin Tiong (b) – 800,000 (800,000) –

Tay Puan Siong (c) – 800,000 (800,000) –

Assoc Prof Loh Han Tong (d) – 800,000 (800,000) –

Total – 5,400,000 (5,400,000) –

(a) Wang Gee Hock resigned on 14 November 2012.(b) Prof Tan Chin Tiong resigned on 8 January 2013.(c) Tay Puan Siong resigned on 14 November 2012.(d) Assoc Prof Loh Han Tong resigned on 29 February 2012 and was re-appointed to the board on 8 January 2013.

No participant received 5% or more of the total number of the options available under the Scheme except for one of the

Directors, Mr Wang Gee Hock.

24C. Accounting for the share options

Group and Company

Share option reserve 2012 2011

$’000 $’000

At beginning of the year 495 749

Forfeiture of share options – transferred to retained earnings – (42)

Exercise of share options (495) (212)

At end of the year – 495

All the share options issued prior to the modifi cation of the share option plan have expired as at 31 December 2006. Hence,

modifi cations to the Scheme in 2007 do not result in any changes in the fair value of these options.

The estimated fair value of each option issued was estimated by an independent external valuer using the Black-Scholes

model for employee stock option valuation. In order to approximate the expectations that would be refl ected in a current

market or negotiated exchange price for these options, the calculation takes into consideration factors like behavioural

considerations and non-transferability of the options granted.

72



25. OTHER RESERVES

Foreign

Share currency

Statutory option translation

Group reserve (a) reserve reserve (b) Total

$’000 $’000 $’000 $’000

At 1 January 2012 4,188 495 728 5,411

Foreign currency translation differences – – (3,450) (3,450)

Exercise of share options (note 24) – (495) – (495)

Transfer from retained earnings to statutory reserve 176 – – 176

At 31 December 2012 4,364 – (2,722) 1,642

At 1 January 2011 3,821 749 (1,647) 2,923

Foreign currency translation differences – – 2,256 2,256

Exercise of share options (note 24) – (212) – (212)

Transfer from share option reserve to retained earnings

(note 24) – (42) – (42)

Transfer from retained earnings to statutory reserve 367 – – 367

Transfer to Disposal Group classifi ed as held for sale – – 119 119

At 31 December 2011 4,188 495 728 5,411

Share

option

Company reserve

$’000


Exercise of share options (note 24) (495)

At 31 December 2012 –


Transfer of share option reserve to retained earnings (note 24) (42)

Exercise of share options (note 24) (212)


(a) The subsidiaries incorporated in the People’s Republic of China (“PRC”) are required by the PRC regulations to appropriate

10% of the net profi t after tax (after offsetting all recognised tax losses carried forward from previous reporting years in

accordance with the PRC Generally Accepted Accounting Principles) to statutory reserve. The appropriation to statutory

reserve must be made before distribution of dividends to shareholders.

(b) The currency translation reserve accumulates all foreign exchange differences on translating the results and net assets of

foreign operations during the year that the Group controls them.

All reserves classifi ed on the face of the statement of fi nancial position as retained earnings represents past accumulated

earnings and are distributable. The other reserves are not available for cash dividends unless realised.

73



26. PROVISIONS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Provisions, total 1,028 702 186 –

The provisions include the following:

(a) $702,000 of the provisions arose from the acquisition of a subsidiary in 2010 for under-provision of certain taxes.

In 2011, an amount of $469,000 was reversed to other credits in profi t or loss as it was no longer required; and

(b) $326,000 of the provisions arose from manpower restructuring requirement, which is charged to profit or

loss as administrative expenses.

27. OTHER FINANCIAL LIABILITIES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Non-current

Bank loans 11,825 14,687 11,825 14,687

Current

Bank loans (secured) 7,716 9,118 – –

Bank loans 12,481 13,859 8,788 9,114

Sub-total 20,197 22,977 8,788 9,114

Total 32,022 37,664 20,613 23,801

The non-current portion is repayable as follows:

Group and Company

2012 2011

$’000 $’000

Due within 2 to 5 years 11,825 14,687

All the amounts are at fl oating interest rates, except for the following that are on fi xed interest rates.

Borrowings – fi xed rate 14,182 17,807

The repayment terms for the above bank loans are summarised as follows:

(a) Repayable in equal monthly or quarterly instalments over a period of four years, commencing between August 2009

and January 2011; and

(b) The principal amount of a bank loan is to be fully repaid in one lump sum in May 2016.

74



27. OTHER FINANCIAL LIABILITIES (cont’d)

The range of fl oating interest rates paid is as follows:

Group Company

2012 2011 2012 2011

Bank loans (secured) 6.51% to 6.72% 7.02% to 7.81% − −

Bank loans 1.72% to 7.28% 1.77% to 7.87% 1.72% to 5.00% 1.77% to 5.00%

All the short-term borrowings carry fl oating rates of interest. The carrying amounts are assumed to be a reasonable

approximation of fair values.

The credit facilities and borrowings for the Group were secured over the following:

(i) Corporate guarantees provided by the Company;

(ii) First legal charge and negative pledges on the subsidiaries’ properties; and

(iii) Negative pledges on certain inventories.

28. FINANCE LEASES

Minimum Finance Present

Group and Company payments charges value

$’000 $’000 $’000

2012

Minimum lease payments payable

Due within one year 7 (1) 6

Due within 2 to 5 years – – –

Total 7 (1) 6

Net book value of plant and equipment under fi nance leases 195

Minimum Finance Present

Group and Company payments charges value

$’000 $’000 $’000

2011

Minimum lease payments payable

Due within one year 82 (7) 75

Due within 2 to 5 years 8 (2) 6

Total 90 (9) 81

Net book value of plant and equipment under fi nance leases 220

Certain plant and equipment of the Company are under fi nance leases. The average lease term is 3 years. For the

reporting year ended 31 December 2012, the fi xed rate of interest for fi nance leases is about 3.3% (2011: 3.3%). All

leases are on a fi xed repayment basis and no arrangements have been entered into for contingent rental payments. All

lease obligations are denominated in Singapore Dollar. The obligations under fi nance leases are secured by the lessor’s

charge over the leased assets.

The carrying amount of the lease liabilities approximates the fair value.

75



29. TRADE AND OTHER PAYABLES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade payables

External parties and accrued liabilities 23,436 26,717 10,204 13,697

Subsidiaries (note 3) – – 870 137

Sub-total 23,436 26,717 11,074 13,834

Other payables

Deposits received 530 316 7 –

Other payables 928 3,370 340 1,208

Sub-total 1,458 3,686 347 1,208

Total trade and other payables 24,849 30,403 11,421 15,042

30. DISPOSAL OF SUBSIDIARY

The following table summarises the carrying value of the account balances of the Disposal Group (note 17).

Group

2012

$’000

Property, plant and equipment 1,631

Investment 10

Inventories 162

Other assets 1,078

Trade and other receivables 465

Cash and short term deposits 348

Trade and other payables (1,612)

Short term loan (2,300)

Net liabilities disposed (218)

Total consideration 100

Satisfi ed by:

Cash consideration 100

Cash balance disposed (348)

Net cash outfl ow (248)

The results from the Disposal Group from the beginning of the reporting year to date of disposal were insignifi cant to the

consolidated fi nancial results of the Group.

76



31. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS

31A. Classifi cation of fi nancial assets and liabilities

The following table summarises the carrying amount of fi nancial assets and liabilities recorded at the end of the reporting

year by FRS 39 categories:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Financial assets

Cash and cash equivalents 12,112 16,851 5,171 7,589

Loans and receivables 37,668 38,418 22,097 25,302

At end of the year 49,780 55,269 27,268 32,891

Financial liabilities

Borrowings at amortised cost 32,028 37,745 20,619 23,882

Trade and other payables at amortised cost 24,894 30,403 11,421 15,042

At end of the year 56,922 68,148 32,040 38,924

Further quantitative disclosures are included throughout these fi nancial statements.

There are no signifi cant fair value measurements recognised in the statements of fi nancial position of the Group and Company.

31B. Financial risk management

The main purpose for holding or issuing fi nancial instruments is to raise and manage the fi nances for the entity’s operating,

investing and fi nancing activities. There are exposures to the fi nancial risks on the fi nancial instruments such as credit risk,

liquidity risk and market risk comprising interest rate, currency risk and price risk exposures. Management has certain

practices for the management of fi nancial risks. However, these are not formally documented in written form. The guidelines

include the following:

i. Minimise interest rate, currency, credit and market risks for all kinds of transactions.

ii. Maximise the use of “natural hedge”: favouring as much as possible the natural off-setting of sales and costs and

payables and receivables denominated in the same currency and therefore put in place hedging strategies only for the

excess balance. The same strategy is pursued with regard to interest rate risk.

iii. All fi nancial risk management activities are carried out and monitored by senior management staff.

iv. All fi nancial risk management activities are carried out following good market practices.

The Group is exposed to currency and interest rate risks. There are no arrangements to reduce such risk exposures through

derivatives and other hedging instruments.

There have been no changes to the exposures to risk; the objectives, policies and processes for managing the risk and the

methods used to measure the risk.

77



31. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (cont’d)

31C. Credit Risk on Financial Assets

Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge their

obligations in full or in a timely manner consist principally of cash balances with banks, cash equivalents and receivables,

and other fi nancial assets. The maximum exposure to credit risk is: the total of the fair value of the fi nancial instruments;

the maximum amount the entity could have to pay if the guarantee is called on; and the full amount of any loan payable

commitment at the end of the reporting year. Credit risk on cash balances with banks and any other fi nancial instruments

is limited because the counterparties are entities with acceptable credit ratings. Credit risk on other fi nancial assets is

limited because the other parties are entities with acceptable credit ratings. For credit risk on receivables an ongoing credit

evaluation is performed on the fi nancial condition of the debtors and a loss from impairment is recognised in profi t or loss.

The exposure to credit risk is controlled by setting limits on the exposure to individual customers and these are disseminated

to the relevant persons concerned and compliance is monitored by Management. There is no signifi cant concentration of

credit risk, as the exposure is spread over a large number of counterparties and customers unless otherwise disclosed in the

notes to the fi nancial statements below.

Note 22 discloses the maturity of the cash and cash equivalents balances.

As part of the process of setting customer credit limits, different credit terms are used. The average credit period generally

granted to trade receivable customers is about 30 to 120 days (2011: 30 to 120 days). However, some customers take a

longer period to settle the amounts.

(a) Ageing analysis of trade receivables amounts that are past due at the end of the reporting year but not impaired:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Less than 60 days 5,436 4,538 1,553 2,422

61 – 150 days 2,062 1,829 1,230 49

150 – 180 days 738 348 648 1

Over 180 days 945 – 427 –

At end of the year 9,181 6,715 3,858 2,472

(b) Ageing analysis as at the end of the reporting year of trade receivables amounts that are impaired:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Less than 60 days 85 – – –

61 – 150 days 540 – 194 –

150 – 180 days 6 – – –

Over 180 days 704 417 1,200 1,200

At end of the year 1,335 417 1,394 1,200

There is no maturity for other receivables (note 19), which are normally with no fi xed terms and other fi nancial assets

(note 20), which represent investment in quoted equity shares.

The allowance, which is disclosed in the note on trade receivables, is based on individual accounts totaling $1.34

million (2011: $0.42 million) for the Group and $1.39 million (2011: $1.20 million) for the Company, that are determined

to be impaired at the end of reporting year. These are not secured.

78




31C. Credit Risk on Financial Assets (cont’d)

Concentration of trade receivable customers as at the end of the reporting year:

Group and Company

2012 2011

$’000 $’000

Top 1 customer 5,070 4,392

Top 2 customers 7,741 7,816

Top 3 customers 9,506 9,873

31D. Liquidity risk

The following table analyses non-derivative fi nancial liabilities by remaining contractual maturity (contractual and undiscounted

cash fl ows):

Less than 1 – 3 3 – 5

Group 1 year years years Total

$’000 $’000 $’000 $’000

2012

Gross borrowings commitments 23,777 2,854 10,257 36,888

Gross fi nance lease obligations 7 – – 7

Trade and other payables 24,894 – – 24,894

At end of the year 48,678 2,854 10,257 61,789

Less than 1 – 3 3 – 5

Group 1 year years years Total

$’000 $’000 $’000 $’000

2011


Gross fi nance lease obligations 82 8 – 90


At end of the year 54,349 4,947 10,600 69,896

Less than 1 – 3 3 – 5

Company 1 year years years Total

$’000 $’000 $’000 $’000

2012


Gross fi nance lease obligations 7 – – 7


At end of the year 22,395 2,854 10,257 35,506

Less than 1 – 3 3 – 5

Company 1 year years years Total

$’000 $’000 $’000 $’000

2011


Gross fi nance lease obligations 82 8 – 90


At end of the year 25,124 4,947 10,600 40,671

79




31D. Liquidity risk (cont’d)

The above amounts, as disclosed in the maturity analysis, are the contractual undiscounted cash fl ows and it differs from the

amounts included in the statements of fi nancial position of the Group and Company. When the counterparty has a choice of

when an amount is paid, the liability is included on the basis of the earliest date on which it can be required to pay. No claims

on the fi nancial guarantees were expected at the end of the reporting year.

The following table shows the maturity analysis of the contingent liabilities:

Company 2012 2011

$’000 $’000

Financial guarantee contracts – in favour of subsidiaries 7,401 9,959

Undertaking to support subsidiaries with defi cit 3,095 615

10,496 10,574

The undiscounted amounts on the bank borrowings with fi xed and fl oating interest rates are determined by reference to the

conditions existing at the reporting date.

The liquidity risk refers to the diffi culty in meeting obligations associated with fi nancial liabilities that are settled by delivering

cash or another fi nancial asset. It is expected that all the liabilities will be paid at their contractual maturity. The average credit

period taken to settle non-related trade payables of the Group and Company is about 30 to 120 days (2011: 30 to 120 days).

The other payables are with short-term durations. The classifi cation of the fi nancial assets is shown in the statement of

fi nancial position as they may be available to meet liquidity needs and no further analysis is deemed necessary.

Group Company

Bank facilities 2012 2011 2012 2011

$’000 $’000 $’000 $’000

Undrawn borrowing facilities 77,510 65,860 69,375 58,020

Unutilised bank guarantees (unsecured) 11,478 4,475 11,478 4,475

The undrawn borrowing facilities are available for operating activities and settlement for other commitments. Borrowing

facilities are maintained to ensure funds are available for the budgeted operations.

31E. Interest rate risk

The interest rate risk exposure is mainly related to changes in fi xed and fl oating interest rates. The interest from fi nancial

assets including cash balances is not signifi cant. The following table analyses the breakdown of the signifi cant fi nancial

instruments (excluding derivatives) by types of interest rate:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000


Fixed rate 14,188 17,889 14,188 17,889

Floating rate 17,840 19,856 6,431 5,993

At end of the year 32,028 37,745 20,619 23,882

The fl oating rate debt obligations are with interest rates that are re-set regularly at one, three or six months intervals. The

interest rates are disclosed in notes 27 and 28.

80




31E. Interest rate risk (cont’d)

Sensitivity analysis

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

A hypothetical increase in interest rates by 100

basis points, with all other variables held constant,

would have an adverse effect on pre-tax profi t for

the year by (257) (278) (160) (170)

The analysis has been performed separately for fi xed interest rate fi nancial liabilities and fl oating interest rate fi nancial liabilities.

The impact of a change in interest rates on fi xed interest rate fi nancial instruments has been assessed in terms of changing

of their fair value. The impact of a change in interest rates on fl oating interest rate fi nancial instruments has been assessed

in terms of changing of their cash fl ows and therefore in terms of the impact on net expenses. The hypothetical changes in

basis points are not based on observable market date (unobservable inputs).

There is a decrease in sensitivity to interest rates caused by the decrease in interest rates during the current reporting year.

31F. Foreign currency risk

Analysis of the Group and the Company’s fi nancial assets and liabilities denominated in non-functional currency:

Group United Chinese

2012 States Dollar Renminbi Others Total

$’000 $’000 $’000 $’000

Financial assets

Cash and cash equivalents 3,045 – – 3,045

Trade and other receivables 8,484 – – 8,484

Total fi nancial assets 11,529 – – 11,529


Borrowings 6,431 – – 6,431


Total fi nancial liabilities 7,851 – – 7,851

Net fi nancial assets at end of the year 3,678 – – 3,678

Group United Chinese

2011 States Dollar Renminbi Others Total

$’000 $’000 $’000 $’000

Financial assets

Cash and cash equivalents 1,424 – 7 1,431

Trade and other receivables 8,058 99 15 8,172

Total fi nancial assets 9,482 99 22 9,603


Borrowings 5,994 – – 5,994

Trade and other payables 6,205 41 73 6,319

Total fi nancial liabilities 12,199 41 73 12,313

Net fi nancial (liabilities)/assets at end of the year (2,717) 58 (51) (2,710)

81




31F. Foreign currency risk (cont’d)

Company United

2012 States Dollar Others Total

$’000 $’000 $’000

Financial assets

Cash and cash equivalents 2,335 – 2,335

Trade and other receivables 8,484 – 8,484

Total fi nancial assets 10,819 – 10,819


Borrowings 6,431 – 6,431

Trade and other payables 1,324 – 1,324

Total fi nancial liabilities 7,755 – 7,755

Net fi nancial assets at end of the year 3,064 – 3,064

Company United

2011 States Dollar Others Total

$’000 $’000 $’000

Financial assets

Cash and cash equivalents 1,341 7 1,348

Trade and other receivables 8,013 15 8,028

Total fi nancial assets 9,354 22 9,376


Borrowings 5,994 – 5,994

Trade and other payables 6,205 73 6,278

Total fi nancial liabilities 12,199 73 12,272

Net fi nancial liabilities at end of the year (2,845) (51) (2,896)

There is exposure to foreign currency risk as part of its normal business.

Sensitivity analysis

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

A hypothetical 10% strengthening in the exchange rate of

the functional currency $ against all other currencies

with all other variables held constant would have an

(adverse) favourable effect on pre-tax (loss)/profi t of (368) 271 (306) 290

A hypothetical 10% strengthening in the exchange rate of

the functional currency $ against the US$ with all other

variables held constant would have an (adverse)

favourable effect on pre-tax (loss)/profi t of (368) 272 (306) 284

The above table shows sensitivity to a hypothetical 10% variation in the functional currency against the relevant foreign

currencies. The sensitivity rate used is the reasonably possible change in foreign exchange rates. For similar rate weakening

of the functional currency against the relevant foreign currencies, there would be comparable impacts in the opposite

direction on the profi t or loss and reserves.

82




31F. Foreign currency risk (cont’d)

The hypothetical changes in exchange rates are not based on observable market data (unobservable inputs). The sensitivity

analysis is disclosed for each currency to which the entity has signifi cant exposure at end of the reporting year. The analysis

above has been carried out on the basis that there are no hedged transactions.

There is an increase in foreign currency rates sensitivity during the current reporting year mainly due to the increase in foreign

currency assets.

In Management’s opinion, the above sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year

end exposures do not refl ect the exposures during the year.

32. CAPITAL COMMITMENTS

Estimated amounts committed at the end of the reporting year for future capital expenditure but not recognised in the

fi nancial statements are as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Commitments to purchase plant and equipment 460 1,448 281 128

33. OPERATING LEASE PAYMENT COMMITMENTS

At the end of the reporting year, the total of future minimum lease payment commitments under non-cancellable operating

leases are as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Not later than one year 947 712 333 271

Later than one year and not later than fi ve years 1,180 1,464 869 837

Later than fi ve years 6,587 6,087 6,587 6,087

Rental expenses for the year 1,329 994 348 351

Operating lease payments represent rentals payable by the Company and subsidiaries for leasehold land, certain factory

properties and offi ce equipment. The lease rental terms for the leasehold land and factory properties are negotiated for a

term of 3 to 60 years and rentals are subject to an escalation clause but the amount of the rent increase is not expected to

exceed a certain percentage.

34. EVENTS SUBSEQUENT TO THE END OF THE REPORTING YEAR

Subsequent to the end of the reporting year, the Board of Directors approved the proposed plans to cease operations of two

of the subsidiaries, Superior Cans & Pails Containers (Pune) Pvt. Ltd. and Superior Metal Printing Phils, Inc. The operations

of the two subsidiaries are still on-going at the date of this report, as the management is still in the midst of working out the

detailed closure plans.

83



35. CHANGES AND ADOPTION OF FINANCIAL REPORTING STANDARDS

For the current reporting year the following new or revised Singapore Financial Reporting Standards were adopted. The

new or revised standards did not require any material modifi cation of the measurement methods or the presentation in the

fi nancial statements.

FRS No. Title

FRS 1 Amendments to FRS 1 – Presentation of Items of Other Comprehensive Income

FRS 12 Deferred Tax (Amendments to) – Recovery of Underlying Assets

FRS 107 Financial Instruments: Disclosures (Amendments to) – Transfers of Financial Assets (*)

(*) Not relevant to the entity.

36. FUTURE CHANGES IN FINANCIAL REPORTING STANDARDS

The following new or revised Singapore Financial Reporting Standards that have been issued will be effective in future. The

transfer to the new or revised standards from the effective dates is not expected to result in material adjustments to the

fi nancial position, results of operations, or cash fl ows for the following year.

Effective date

for periods

beginning

FRS No. Title on or after

FRS 1 Amendment to FRS 1 Presentation of Financial Statements (Annual Improvements) 1 Jan 2013

FRS 16 Amendment to FRS 16 Property, Plant and Equipment (Annual Improvements)

FRS 19 Employee Benefi ts (Revised) 1 Jan 2013

FRS 727 Consolidated and Separate Financial Statements (Amendments to) 1 Jul 2012

FRS 27 Separate Financial Statements (Revised) 1 Jan 2014

FRS 28 Investments in Associates and Joint Ventures (Revised) (*) 1 Jan 2014

FRS 32 Amendment to FRS 32 Financial instruments: Presentation (Annual Improvements) 1 Jan 2013

FRS 107 Amendments to FRS 32 and 107 titled Offsetting Financial Assets and Financial Liabilities 1 Jan 2013

FRS 110 Consolidated Financial Statements 1 Jan 2014

FRS 111 Joint Arrangements (*) 1 Jan 2014

FRS 112 Disclosure of Interests in Other Entities 1 Jan 2014

FRS 110 Amendments to FRS 110, FRS 111 and FRS 112 1 Jan 2014

FRS 113 Fair Value Measurements 1 Jan 2013

INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine (*) 1 Jan 2013

(*) Not relevant to the entity.

84


Description/location Gross fl oor area (Sqm) Tenure of land

2 storey offi ce and factory building 15,087 60 years leasehold property with effect

No. 7 Benoi Sector from 1990 with an option to renew for

Singapore 629842 a further 30 years from 2020 subject to

the stipulated terms, conditions and

covenants contained in the agreement


No. 429, Li Hang Road from 1999

Pudong Wang Qiao Industrial Park New Area

Shanghai

People’s Republic of China 201201

Single storey offi ce, factory and dormitory building 21,190 50 years leasehold property with effect

Dong Jiang Industrial Zone from 1995

Shui Kou Zhen, Huizhou


6 storey dormitory building 574 20 years leasehold property with effect

No. 14, 6th Floor Fa Tou West from 1999

3 Mile District, Chaoyang District

Beijing Province



No. 30, Langfang Economic Tech Dev. Zone from 2001

Hebei Province



Wuqing District, Tianjin Jinbin Industrial Park from 2009

10 Tai Yuan Road



No. 309 Tongyu Road from 2006

Tudian Town Light Textile Industrial Park

Tongxiang City, Zhejiang Province


PROPERTIES OWNED BY THE GROUP

85


SHARE CAPITAL

Issued and paid-up share capital : $56,530,491.00

Number of shares : 382,706,000 ordinary shares

Class of Shares : Ordinary shares

Voting rights : 1 vote per ordinary share

ANALYSIS OF SHAREHOLDINGS BY RANGE AS AT 18 MARCH 2013

Number of Number of

Size of Holdings Shareholders % Shares %

1 to 999 75 4.41 38,006 0.01

1,000 to 10,000 1,133 66.69 4,977,251 1.30

10,001 to 1,000,000 482 28.37 22,628,500 5.91

1,000,001 and above 9 0.53 355,062,243 92.78

Total 1,699 100.00 382,706,000 100.00

Based on the information available to the Company as at 18 March 2013, approximately 14.81% of the issued ordinary shares

of the Company is held by the public and thereafter, Rule 723 of the Listing Manual issued by the Singapore Exchange Securities

Trading Limited is complied with.

TOP TWENTY SHAREHOLDERS AS AT 18 MARCH 2013

Number of

No. Name of Shareholders Shares %

1 CROWN Speciality Packaging Investment Pte. Ltd. 326,031,243 85.19

2 Ang Kong Meng 13,399,000 3.50

3 United Overseas Bank Nominees Pte Ltd 5,504,500 1.44

4 Goh Ah Tee @ Goh Hui Chua 2,562,000 0.67

5 DBS Nominees Pte Ltd 1,895,500 0.50

6 OCBC Nominees Singapore Pte Ltd 1,828,500 0.48

7 Kok Hwa Investment Pte Ltd 1,608,000 0.42

8 Phillip Securities Pte Ltd 1,218,500 0.32

9 Tan Chin Tiong 1,015,000 0.27

10 Cheng Ngan Yoke Mrs Emily Fong 863,000 0.23

11 Tay Puan Siong 800,000 0.21

12 Loh Fa Hin 583,000 0.15

13 Citibank Nominees Singapore Pte Ltd 566,000 0.15

14 Chin Khin Siong 517,000 0.13

15 Wong Liang Toon 479,000 0.12

16 UOB Kay Hian Pte Ltd 464,000 0.12

17 Tan Kow Meng 340,000 0.09

18 Low Chee Kong 323,000 0.08

19 Lee Ah Kee 312,000 0.08

20 Ang Bee Hiong 300,000 0.08

Total 360,609,243 94.23

STATISTICS OF SHAREHOLDINGSAs at 18 March 2013

86


SUBSTANTIAL SHAREHOLDER AS AT 18 MARCH 2013

Number of Number of

Shares Shares Percentage of

Substantial Shareholder Direct Interest Indirect Interest Issued shares

CROWN Speciality Packaging Investment Pte. Ltd. 326,031,243 – 85.19

CROWN Asia Pacifi c Holdings Pte. Ltd. – 326,031,243 85.19

Société de Participations CarnaudMetalbox – 326,031,243 85.19

Crown European Holdings – 326,031,243 85.19

Crown Developpement – 326,031,243 85.19

Crown Packaging Lux II S.àr.l. – 326,031,243 85.19

Crown Packaging Lux I S.àr.l. – 326,031,243 85.19

Crown International Holdings, Inc. – 326,031,243 85.19

Crown Cork & Seal Company, Inc. – 326,031,243 85.19

Crown Holdings, Inc. – 326,031,243 85.19

Polaris Incorporations Limited – 326,031,243 85.19

Pianissimo Ltd – 326,031,243 85.19

SMP Investments (S) Pte Ltd – 326,031,243 85.19

STATISTICS OF SHAREHOLDINGSAs at 18 March 2013

87


NOTICE IS HEREBY GIVEN that the Thirty-Fourth Annual General Meeting of Superior Multi-Packaging Limited will be held at

7 Benoi Sector, Singapore 629842 on Monday, 29 April 2013 at 9.30 a.m. to transact the following business:

AS ORDINARY BUSINESS

1. To receive and adopt the audited fi nancial statements, the reports of the Directors and of the Auditors for the year ended

31 December 2012.

2. To re-elect the following Directors:

(a) Mr Goh Hock Huat, retiring by rotation pursuant to Article 97 of the Company’s Articles of Association.

(b) Mr Salaerts Jozef, retiring by rotation pursuant to Article 97 of the Company’s Articles of Association.

(c) Dr Loh Han Tong, retiring by rotation pursuant to Article 97 of the Company’s Articles of Association.

(d) Mr Lye Thiam Fatt Joseph Victor, retiring by rotation pursuant to Article 97 of the Company’s Articles of Association.

3. To re-appoint Mr Khong Heng Kin as Director of the Company to hold offi ce until the next Annual General Meeting pursuant

to Section 153(6) of the Companies Act, Cap. 50.

4. To approve the payment of S$307,500 as Directors’ Fees for the year ending 31 December 2013.

5. To re-appoint RSM Chio Lim LLP as Auditors of the Company and to authorise the Directors to fi x their remuneration.

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following Ordinary Resolutions:

6. Authority to grant options and issue shares pursuant to the exercise of options under the Superior Multi-Packaging (2001)

Executives’ Share Option Scheme (the “2001 Scheme”)

“That approval be and is hereby given to the Directors to offer and grant options in accordance with the provisions of the

2001 Scheme (“Options”) and to allot and issue from time to time such number of ordinary shares of the Company (“Shares”)

as may be required to be issued pursuant to the exercise of the Options under the 2001 Scheme provided always that the

aggregate number of Shares to be issued pursuant to the 2001 Scheme shall not exceed 15% of the total number of issued

shares (excluding treasury shares) of the Company from time to time.”

7. Authority to Issue Shares

That pursuant to Section 161 of the Companies Act, and the listing rules of the SGX-ST, approval be and is hereby given to

the Directors of the Company at any time to such persons and upon such terms and for such purposes as the Directors may

in their absolute discretion deem fi t, to:

(a) (i) issue shares in the capital of the Company whether by way of rights, bonus or otherwise;

(ii) make or grant offers, agreements or options that might or would require shares to be issued or other transferable

rights to subscribe for or purchase shares (collectively, “Instruments”) including but not limited to the creation and

issue of warrants, debentures or other instruments convertible into shares;

(iii) issue additional Instruments arising from adjustments made to the number of Instruments previously issued in

the event of rights, bonus or capitalisation issues; and

NOTICE OF ANNUAL GENERAL MEETING

88


(b) (notwithstanding the authority conferred by the shareholders may have ceased to be in force) issue shares in pursuance

of any Instrument made or granted by the Directors while the authority was in force,

provided always that

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of

Instruments made or granted pursuant to this Resolution) does not exceed 50% of the total number of issued shares

excluding treasury shares, of which the aggregate number of shares (including shares to be issued in pursuance of

Instruments made or granted pursuant to this Resolution) to be issued other than on a pro-rata basis to shareholders

of the Company does not exceed 20% of the total number of issued shares excluding treasury shares, and for the

purpose of this Resolution, the total number of issued shares excluding treasury shares shall be the Company’s total

number of issued shares excluding treasury shares at the time this Resolution is passed, after adjusting for:

(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of

share awards which are outstanding or subsisting at the time this Resolution is passed; and

(ii) any subsequent bonus issues, consolidation or subdivision of shares;

(2) in exercising the authority conferred by this Resolution, the Directors shall comply with the provisions of the Listing

Manual for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of

Association of the Company; and

(3) such authority shall, unless revoked or varied by the Company at a general meeting, continue in force until the

conclusion of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company

is required by law to be held, whichever is the earlier.

8. To transact any other business that may be transacted at an Annual General Meeting.

BY ORDER OF THE BOARD

Juliana Lee Kim Lian

Liew Meng Ling

Company Secretaries

12 April 2013

Singapore


89


Notes:

1. A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to

attend and vote in his stead and a proxy need not be a Member of the Company.

2. The instrument appointing the proxy must be lodged at 7 Benoi Sector, Singapore 629842, not less than 48 hours before

the time set for holding the Annual General Meeting.

Explanatory Notes:

1. Mr Goh Hock Huat, a non-executive director, if re-elected, will remain as a member of the Executive Committee and

Audit Committee.

2. Mr Salaerts Jozef, a non-executive director, if re-elected, will remain as the Chairman of the Executive Committee and a

member of the Nominating Committee and Executive Resource and Compensation Committee.

3. Dr Loh Han Tong, a non-executive director, if re-elected, will remain as a member of the Executive Committee.

4. Mr Lye Thiam Fatt Joseph Victor, an independent director, if re-elected, will remain as the Chairman of the Audit Committee

and a member of the Nominating Committee and Executive Resource and Compensation Committee.

5. Mr Khong Heng Kin, an independent director, if re-appointed, will remain as the Chairman of the Nominating and Executive

Resource and Compensation Committee and a member of the Audit Committee.

6. The Ordinary Resolution proposed in item 6 above, if passed, will empower the Directors of the Company to grant options

and issue shares in the capital of the Company pursuant to the exercise of the options under the Superior Multi-Packaging

(2001) Executives’ Share Option Scheme up to an amount in aggregate not exceeding 15% of the issued shares (excluding

treasury shares) of the Company.

7. The Ordinary Resolution proposed in item 7 above is to authorise the Directors of the Company from the date of the above

Meeting until the next Annual General Meeting to issue shares and convertible securities in the Company up to an amount

of 50% of the total number of issued shares excluding treasury shares. 20% may be issued other than on a pro-rata basis.


This page has been intentionally left blank

For investors who have used their CPF monies to buy shares in the capital of Superior Multi-Packaging Limited, this Annual Report is

forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by

them.

CPF investors who wish to attend the Annual General Meeting as OBSERVERS have to submit their requests through their respective Agent

Banks so that their Agent Banks may register, in the required format with the Company’s Registrar. (Please see note No. 8 overleaf).

I/We, _________________________________________________________________________________________________________

of ____________________________________________________________________________________________________________

being a Member/Members of the above named Company, hereby appoint:

Name AddressNRIC/Passport

Number

Proportion of

Shareholdings (%)

and/or (delete as appropriate)

as my/ our proxy/ proxies to attend and vote for me/ us on my/ our behalf and, if necessary, to demand a poll at the Thirty-Fourth

Annual General Meeting of the Company to be held at 7 Benoi Sector, Singapore 629842 on Monday, 29 April 2013 and at any

adjournment thereof in the manner indicated below:

No. Resolution For Against

1 Adoption of Audited Financial Statements

2(a) To re-elect Mr Goh Hock Huat, a Director retiring by rotation under Article 97

2(b) To re-elect Mr Salaerts Jozef, a Director retiring by rotation under Article 97

2(c) To re-elect Dr Loh Han Tong, a Director retiring by rotation under Article 97

2(d) To re-elect Mr Lye Thiam Fatt Joseph Victor, a Director retiring by rotation under Article 97

3 To re-elect Mr Khong Heng Kin, a Director retiring pursuant to Section 153(6) of the Companies

Act, Cap. 50

4 Approval of Directors’ Fees for the year ending 31 December 2013

5 Re-appointment of RSM Chio Lim LLP as Auditors

6 Authority to grant options and issue shares pursuant to the Superior Multi-Packaging (2001)

Executives’ Share Option Scheme

7 Authority to issue shares

8 Any other business

(Please indicate with a cross (x) in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions

as set out in the Notice of the Annual General Meeting. In the absence of specifi c directions, your proxy may vote or abstain

as he/she thinks fi t.)

Signed this ______ day of ____________________________ 2013.

Signature(s) of Member(s)

(A corporation, if applicable, must also affi x its common seal here.)

IMPORTANT: PLEASE READ NOTES OVERLEAF

SUPERIOR MULTI-PACKAGING LIMITED(Registration No. 197902249R)

(Incorporated in the Republic of Singapore)

PROXY FORM

Number of

Shares Held

Notes:

1. Please insert the total number of shares held by you. If you have shares entered against your name on the Depository

Register (as defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of

shares. If you have shares registered in your name in the Register of Members of the Company, you should insert that

number of shares. If you have shares entered against your name in the Depository Register and registered in your name

in the Register of Members, you should insert the aggregate number of shares. If no number is inserted, this instrument of

proxy will be deemed to relate to all the shares held by you.

2. A Member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend

and vote on his behalf. A proxy need not be a Member of the Company.

3. The instrument appointing a proxy or proxies must be deposited at the Company’s place of business at 7 Benoi Sector,

Singapore 629842, not less than 48 hours before the time set for the Meeting.

4. Where a Member appoints two proxies, the appointments shall be invalid unless he specifi es the proportion (expressed as

a percentage of the whole) of his shareholdings to be represented by each proxy.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in

writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under

its seal or under the hand of any offi cer or attorney duly authorised.

6. A corporation which is a Member may authorise by resolution of its directors or other governing body such person as it thinks

fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50.

7. The Company shall be entitled to reject this instrument of proxy if it is incomplete, improperly completed or illegible or where

the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in this instrument of

proxy. In addition, in the case of Members whose shares are deposited with The Central Depository (Pte) Limited (“CDP”), the

Company may reject any instrument of proxy lodged if such Member is not shown to have shares entered against his name

in the Depository Register as at 48 hours before the time set for holding the Meeting as certifi ed by CDP to the Company.

8. Agent Banks acting on the request of the CPF Investors who wish to attend the meeting as Observers are required to

submit in writing, a list with details of the investors’ names, NRIC/Passport numbers, addresses and number of shares held.

The list, signed by an authorised signatory of the Agent Bank, should reach the Company’s Registrar, M & C Services

Private Limited, 112 Robinson Road #05-01, Singapore 068902, at least 48 hours before the time appointed for holding

the Annual General Meeting.

CONTENTS

1 Our Corporate Credo

3 Corporate Profi le

5 Group Financial Highlights

7 Corporate Structure

8 Message to Shareholders

10 Board of Directors

12 Corporate Information

13 Corporate Governance

24 Directors’ Report and Financial Statements

84 Properties Owned by the Group

85 Statistics of Shareholdings

87 Notice of Annual General Meeting

Proxy Form


ANNUAL REPORT 2012

SU

PE

RIO

R M

ULT

I-PA

CK

AG

ING

LIMIT

ED

AN

NU

AL R

EP

OR

T 2012

Registration No. 197902249R

7 Benoi Sector, Singapore 629842Tel: +65 6268 3933 Fax: +65 6265 7151 www.smpl.com.sg

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